The latest Nationwide House Price Index for October shows annual growth dropped from 2.2% in September and was just 0.1% higher on a monthly basis to £265,738
The property market appears to have turned cautious in the build-up to the Autumn Budget with house price growth declining to 2.4% annually during October, according to Nationwide’s figures.
The latest Nationwide House Price Index for October shows annual growth dropped from 2.2% in September and was just 0.1% higher on a monthly basis to £265,738.
Robert Gardner, Nationwide’s chief economist, said Housing market activity has remained relatively resilient in recent months, with the number of mortgage approvals approaching the levels seen pre-pandemic, despite the significantly higher interest rate environment.
Solid labour market conditions, with low levels of unemployment and strong income gains, even after taking account of inflation, have helped underpin a steady increase in activity and house prices since the start of the year, he said.
Providing the economy continues to recover steadily, as we expect, housing market activity is likely to continue to strengthen gradually as affordability constraints ease through a combination of modestly lower interest rates and earnings outpacing house price growth, he said.
Commenting on the index, Myles Moloney, area sales manager at Chase Buchanan, said: At the beginning of October we saw continued buyer confidence which was boosted by favourable mortgage rates and a greater number of properties being put up for sale. As we were nearing the Autumn Budget, however, house hunters and sellers grew more cautious.
Tom Bill, head of UK residential research at Knight Frank, said: We expect this year’s house price recovery to come under pressure following the rise in borrowing costs triggered by the Budget. How much depends on the reaction of bond markets in coming days and the BoE’s rate decision and comments this week. It appears a ‘mini-Budget’ moment has so far been avoided.
Addressing the Budget and Stamp Duty changes, Gardner said the main impact is likely to be on the timing of property transactions, as buyers aim to ensure their house purchases complete before thresholds drop in April 2025.
He added: This will lead to a jump in transactions in the first three months of 2025 (especially March), and a corresponding period of weakness in the following three to six months, as occurred in the wake of previous changes.
