Annual house price growth in the UK has seen a slight increase, according to Nationwide’s latest House Price Index.
The yearly growth rose to 2.2%, up from 2.1% in August, with the average house price now standing at £271,995.
Nationwide also reported a monthly increase of 0.5% after recording a dip of 0.1% the previous month.
On a regional basis, which is measured quarterly, Nationwide said that most regions of the UK saw a “modest slowdown in annual house price growth”. Northern Ireland remained the strongest performer, with annual house price growth standing at 9.6%, while the North recorded growth of 5.1%, both marginally lower than the previous quarter.
The South of England saw the biggest slowdowns, with growth in the South East dropping to 0.3% from 2.6% quarter-on-quarter, London falling to 0.6% from 1.4%, the South West dropping to 0.9% from 2.4% and the Outer Metropolitan area of London slowing to 1% from 2.9% in Q2.
The whole of Northern England saw an increase of 3.4% year-on-year, while the South in total slowed to 0.7%.
Robert Gardner, chief economist at Nationwide, said: The annual pace of UK house price growth was little changed in September at 2.2%, marginally stronger than the 2.1% recorded in August. Prices increased by 0.5% month on month, after taking account of seasonal effects.”
“The broad stability in the annual rate of house price growth over the past three months mirrors that of activity. The number of mortgages approved for house purchase have been hovering at around 65,000 cases per month, close to the pre-pandemic average (despite the higher interest rate environment).”
“Despite ongoing uncertainties in the global economy, underlying conditions for potential home buyers in the UK remain supportive.”
“Unemployment is low, earnings are rising at a healthy pace, household balance sheets are strong and borrowing costs are likely to moderate a little further if Bank Rate is lowered in the coming quarters as we, and most other analysts, expect.”
“Providing the broader economic recovery is maintained, housing market activity is likely to strengthen gradually in the quarters ahead.”
Tom Brown, managing director of real estate at Ingenious, said: “Today’s data underscores the resilience and appeal of the UK property sector. Despite elevated inflation and stubborn borrowing costs, we welcomed the BoE’s recent rate cut as a hopeful first step in a much-needed easing cycle. There’s clearly a significant and notable shortage of housing inventory across various price brackets and locations. Consequently, any decline in homeowner sales is likely counterbalanced by increased demand from renters and investors. This is a trend that is not going away.”
“However, it’s crucial to recognise that the situation isn’t consistent nationwide or across different property pricing brackets. It’s helpful to delve into subsectors and regional dynamics when assessing opportunities, as a broad market view can be misleading. In the real estate sector, we’re seeing significant investment capital for assets for long-term rental. On account of their scale and buying power, these typically institutional investors face fewer disruptions than owner occupiers or small-scale Buy-to-let investors.”
