Annual house price growth slowed to 8.5 per cent in November, Nationwide’s latest house price index shows.
Seasonally adjusted prices rose by just 0.3 per cent over the month, compared to October’s 0.5 per cent rise.This month’s price index shows the average price (not seasonally adjusted) was £189,388, up from £189,333 in October.
Nationwide’s chief economist Robert Gardner says this is the third month in a row where growth has slowed.
“Housing market activity levels have remained relatively weak in recent months. The number of mortgages approved for house purchase in September was almost 20 per cent below the level prevailing at the start of the year and 27 per cent below the long-term average.”
Turnover in the market is also well below the long-term average, Gardner says.
“There is something of a disconnect between the slowdown in the housing market in recent months and broader economic indicators, which have remained relatively upbeat. While cooling in the London market is a part of the story, this is unlikely to be main explanation for the slowdown,” he says.
“Affordability does not appear overly stretched, at least at the UK level, with first time buyers continuing to represent an unusually high proportion of mortgage activity and with typical mortgage payments as a share of average income close to the long run average. Historically low mortgage rates have helped to mitigate against the fact that house prices have been outstripping income growth.
“Forward looking indicators, such as new buyer enquiries point to further softness in the near-term. However, if the economy and the labour market remain in good shape and mortgage rates do not rise sharply, activity is likely to pick up in the quarters ahead.”
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