Latest Nationwide Index reveals house price growth slowdown

Wednesday 2nd November 2016

The latest Nationwide House Price Index has revealed that annual house price growth slowed in October, down to 4.6% from the 5.3% recorded in September. 
Meanwhile, on a monthly basis, house prices were unchanged in October. This follows fifteen consecutive monthly increases in house price rises and has helped to cause the slowdown in annual house price growth. 
“Measures of housing market activity remain fairly subdued, with the number of residential property transactions 10% below the levels recorded in the same period of 2015 in recent months,” Robert Gardner, Nationwide's Chief Economist, said. 
“However, this weakness may still in part reflect the after-effects of the introduction of stamp duty on second homes introduced in April, where buyers brought forward transactions to Q1 to avoid additional stamp duty liabilities. Policy changes impacting the Buy to Let market may also be playing a role in dampening activity.”
Nonetheless, Gardner expects demand conditions to remain fairly stable in the near-term, with mortgage approvals edging up slowly in September. What's more, surveyors report that new buyer enquiries have also   grown modestly in recent months. 
Although the economic outlook is currently uncertain thanks to Brexit, Gardner believes solid labour conditions and historically low borrowing costs should offer buyers confidence. In addition, the relatively low number of properties on the market and the low rates of housebuilding are likely to keep the demand/supply fairly tight. 
Ian Thomas, Co-founder and Director of LendInvest, said of Nationwide's latest Index: “We are starting to see activity pick up in the housing market. Sellers have become more realistic about the price they can achieve for their property since the Brexit vote, while the fall in the value of the pound has made UK property more attractive to international buyers.”
He added: “There is a lot of talk around the industry about the prospect of Stamp Duty being changed again in the Autumn Statement, which could provide a further boost.”

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