House price growth slows to 5.3% in September

Nationwide-Building-Logo-Closeup-700x450.jpgAnnual house price growth slowed in September to 5.3 per cent from 5.6 per cent in August, the latest figures from Nationwide Building Society show.

Since early 2015, house price growth has remained within a narrow range of 3 and 6 per cent.

Prices increased by 0.3 per cent between August and September to an average of just over £206,000.

Nationwide chief economist Robert Gardner says: “The relative stability in the rate of house price growth suggests that the softening in housing demand evident in recent months has been broadly matched on the supply side of the market.

“Survey data indicates that, while new buyer enquiries have remained fairly subdued, the number of homes on the market has remained close to all-time lows, in part due to low rates of construction activity.”

Regional price trends were also little changed. Regions in the south east of England continued to record the strongest gains even though price growth slowed noticeably in the Outer Metropolitan region (from 12.4 per cent in Q2 to 9.6 per cent in Q3) and in London (from 9.9 per cent in Q2 to 7.1 per cent in Q3).

House price growth remained subdued in Scotland (2 per cent) and Northern Ireland (2.4 per cent) and small price declines were recorded in Wales (-0.5 per cent) and the North of England (-0.2 per cent), all relative to Q3 last year.

Gardner adds: “The number of new homes built in England has picked up, but is still not sufficient to keep up with the expected increase in the population. In the four quarters to Q2 2016, 139,000 new houses were completed, 30 per cent higher than the low point seen in 2010.

“However, this is still around 15 per cent below the average rate of building in the five years before the financial crisis and 38 per cent below the 225,000 new households projected to form each year over the coming decade.”

LendInvest co-founder Ian Thomas says: “September is traditionally a month when the housing market begins to pick up steam, with the holiday period coming to an end.

“As such, these figures are a useful barometer for what happens next. While transactions have certainly slowed in prime central London following the additional Stamp Duty charge on second homes and the Brexit vote, there is clearly a strong desire to buy across much of the rest of the country.

“The Housing Minister Gavin Barwell has made positive noises about recognising the need for all types of new homes, rather than simply focusing on owner occupation.

“But it will take time to tackle the structural housing shortage that has built up over decades. That shortage will act as a brake on any house price softening we may see in the months to come.”