House price growth softened in November, despite the dearth of properties on the market, new figures show.
According to the Nationwide House Price Index, the annual pace of price growth in November slowed a little, to 3.7% from 3.9% the previous month.
UK house prices edged up by 0.1% in November and the average annual house price was £196,807.
Nationwide said the annual rate of house price was broadly consistent with earnings growth over the longer term.
Commenting on the figures, Robert Gardner, Nationwide’s chief economist, said: “While this bodes well for a sustainable increase in housing market activity in the period ahead, much will depend on whether building activity can keep pace with increasing demand.”
Chancellor George Osborne announced plans in this week’s Autumn Statement to build 400,000 homes as part of the government’s commitment to boosting home ownership. He also said that as of 1 April next year, people purchasing buy-to-let properties and second homes will pay an extra 3% in stamp duty.
Osborne pledged to build 200,000 starter homes with 20% discounts for under-40s, 135,000 shared ownership homes, 10,000 rent-to-buy homes and 8,000 specialist properties for the elderly and disabled.
The society was positive about the Chancellor’s measures, but warned the current rate of construction activity was “well below” the amount needed each year.
Nationwide said only 135,000 new homes were built in England in the twelve months to September, well below the 220,000 new households that are projected to form each year over the next decade.
“Surveyors have continued to report a dearth of properties on the market in recent months, with the number of available homes reportedly at the lowest level since the late 1970s,” said Gardner.
Howard Archer, chief economist at IHS Global Insight, said the change in stamp duty could lead to an increase in demand over the coming months.
“In the near term, it is very possible that the decision to impose a 3% surcharge on stamp duty on purchases of buy-to-let properties and second homes from April 2016 will lead to an increase in housing demand and exert upward pressure on prices as prospective buyers look to beat the increase.
“Further out, the move could modestly dilute housing market activity and upward pressure on prices.”
If Nationwide were saying only 135 000 houses were built in the uk in the last 12 months then that is very odd. They must have all been built in East Anglia and I know that is not true. Is someone playing with statistics??