The October House Price Index from Nationwide has recorded a slight in house price growth, with annual figures up 2.4% and a month-on-month increase of 0.3%.
‘The housing market has remained broadly stable in recent months, with house prices rising at a modest pace and the number of mortgages approved for house purchase maintained at similar levels to those prevailing before the pandemic struck’ said Nationwide’s chief economist Robert Gardner.
“Against a backdrop of subdued consumer confidence and signs of weakening in the labour market, this performance indicates resilience , especially since mortgage rates are more than double the level they were before Covid struck and house prices are close to all-time highs.”
If income growth continues to outpace house price growth, affordability is expected to improve, he added.
“Borrowing costs are also likely to moderate a little further if Bank Rate is lowered again in the coming quarters. This should support buyer demand, especially since household balance sheets are strong – indeed, in aggregate the ratio of household debt to disposable income is at its lowest for two decades.”
Iain McKenzie, CEO of The Guild of Property Professionals, said Nationwide’s figures point to a housing market regaining its footing. He added:
“While higher supply levels and ongoing geopolitical and economic uncertainty suggest a steady rather than spectacular trajectory ahead, the fundamentals remain encouraging. The combination of a wider choice of homes, rising real wages, and a lower base rate environment is helping to stabilise affordability and sustain buyer activity. We’re also seeing a tangible lift in mortgage approvals, which is often a leading indicator of increased transaction volumes in the months to come.”
“Looking forward, we expect growth to remain modest but consistent through the end of the year. Much will hinge on the autumn budget and any policy measures affecting housing or taxation. While short-term caution is understandable, the medium-term picture looks increasingly positive as stability returns, and mortgage flexibility improves.”
Propertymark CEO Nathan Emerson agreed the figures are positive, but said first-time buyers continue to struggle with affordability. ‘As the year continues to unfold, we have seen challenges and achievements in almost equal measure’, he explained.
“It is positive for those on the housing ladder to see them accumulate more equity. However, the flip side is that it remains ever more demanding for first-time buyers to attain a foothold on their housing journey.
“Three base rate dips have helped increase consumer affordability; however, we still have a rate of inflation that is near double what the Bank of England is hoping for.
“We have seen stamp duty threshold changes disrupting sales trends for those in England and Northern Ireland earlier this year, and we now have the autumn budget just around the corner which may influence the smooth flow of property transactions, with many people holding out to see what changes may potentially be announced.”
