While house prices remain lower compared to last year, the annual rate of house price growth improved to a less negative -3.3% last month from -5.3% in September
The average price of a UK home rose by 0.9% to £259,423 in October from £257,808 in September, according to the Nationwide Building Society.
While house prices remain lower compared to last year, the annual rate of house price growth improved to a less negative -3.3% last month from -5.3% in September.
October saw a 0.9% increase in UK house prices, after taking account of seasonal effects, Robert Gardner, chief economist at Nationwide Building Society, commented on the figures in the latest Nationwide House Price Index. Nevertheless, housing market activity has remained extremely weak, with just 43,300 mortgages approved for house purchase in September, nearly 30% below the monthly average prevailing in 2019.
This is not surprising as affordability remains stretched. Market interest rates, which underpin mortgage pricing, have moderated somewhat, but they are still well above the lows prevailing in 2021, he added.
Gardner added that the increase in house prices in October most likely suggested that the supply of properties on the market is constrained.
There is little sign of forced selling, which would exert downward pressure on prices, as labour market conditions are solid and mortgage arrears are at historically low levels, he added.
Activity and house prices are likely to remain subdued in the coming quarters. In spite of signs that cost-of-living pressures are easing, with the rate of inflation now running below the rate of average earnings growth, consumer confidence remains weak and surveyors continue to report lower levels of new buyer enquiries.
Gardner also suggested that borrowing costs are not likely to return to the historic lows seen after the pandemic with the BoE rate not expected to drop considerably in the years ahead.