Annual house price growth

Is modest house price growth the 'new norm'?

Annual house price growth fell to just 0.2% in September from 0.6% in the previous month, according to the latest Nationwide house price index.

It found that there was a 0.2% decline month-on-month in house prices, with the average price now at £215,352.

Robert Gardner, chief economist at Nationwide, said: “This marks the 10th month in a row in which annual price growth has been below 1%.

“Indicators of UK economic activity have been fairly volatile in recent quarters, but the underlying pace of growth appears to have slowed as a result of weaker global growth and an intensification of Brexit uncertainty.”

House prices in several regions declined in Q3, with London witnessing a 1.7% decrease, the outer metropolitan area down 1.5% and the outer South East region falling by 0.6%.

Mark Harris, chief executive at SPF Private Clients, added that with London being the weakest-performing region, it was welcome news for those struggling to get on the housing ladder. 

“This suggests that this correction has not yet made the capital affordable, but maybe stopped it getting quite so far out of reach.

“What is clear is that lenders are keen to lend, and extremely competitive mortgages are the result. 

“It is a good time to be a borrower.”

Gareth Lewis, commercial director at MT Finance, said: “This is not Armageddon, but what we have seen for many months — property prices stabilising, which means a small increase in some areas and a small decrease in others.”

Meanwhile, Northern Ireland was the best-performing region in Q3, with a 3.4% increase, followed by Wales and the North West, at 2.9% and 2.5% growth, respectively.

“Growth in other areas, such as Northern Ireland and the North West, show that people are looking for opportunities for value,” Gareth added.

“Is this the new norm — modest growth rather than boom and bust? 

“More modest year-on-year growth is more manageable than say 25% and it will be interesting to see where prices settle after Brexit.”

Guy Harrington, CEO at Glenhawk, added: “If these were ‘normal’ times, we’d expect the favourable underlying drivers of low interest rates and high employment to be supporting a buoyant market. 

“However, these are unprecedented times and the record that is playing housing growth is stuck until the needle bounces over the Brexit bump, although that assumes that’s all it is.”

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