• Swindon & Wiltshire News
• Wednesday December 1 2021
• Author Name: Peter Davison

Annual house price growth has moved back into double digits, says Nationwide

The annual growth in house prices has moved back into double digits in the last month, according to figures published by Swindon-based building society Nationwide today (Wednesday).

Nationally, the increase stood at 10 percent in November, according to Nationwide’s monthly House Price Index. In October growth stood at 9.9 percent.

At the beginning of November, the UK’s second-largest mortgage lender said the average UK house price had broken the the quarter-million pound mark for the first time.

In a month, the average house price has increased from £250,311 to £252,687.

“Annual house price growth remained strong in November at 10 percent, marginally higher than the 9.9 percent recorded in October, said Nationwide’s chief economist Robert Gardner.

“Prices rose 0.9 percent in month-on-month terms, after taking account of seasonal effects. As a result, house prices are now almost 15 percent above the level prevailing in March last year when the pandemic struck the UK.

“There have been some signs of cooling in housing market activity in recent months. For example, the number of housing transactions were down almost 30 percent year-on-year in October.

“But this was almost inevitable, given the expiry of the Stamp Duty holiday at the end of September, which gave buyers a strong incentive to bring forward their purchase to avoid additional tax.

“Indeed, activity has been extremely buoyant in 2021. The number of housing transactions so far this year has already exceeded the number recorded in 2020 with two months still to go and is actually tracking close to the number seen at the same stage in 2007, before the global financial crisis struck.

“Moreover, underlying activity appears to be holding up well. The number of mortgages approved for house purchases in October was still running above the 2019 monthly average.

“Early indications also suggest that labour market conditions remain robust, despite the furlough scheme finishing at the end of September.

“If this is maintained, housing market conditions may remain fairly buoyant in the coming months, especially since the market has momentum and there is scope for ongoing shifts in housing preferences, as a result of the pandemic, to continue to support activity.

“But the outlook remains uncertain, where a number of factors suggest the pace of activity may slow.

“It is unclear what impact the new ‘Omicron’ variant will have on the wider economy. While consumer confidence stabilised in November, sentiment remains well below the levels seen during the summer, partly as a result of a sharp increase in the cost of living.

“Moreover, inflation is set to rise further, probably towards five percent in the coming quarters.

“Even if economic conditions continue to improve, rising interest rates may exert a cooling influence on the market.

“Indeed, house price growth has been outpacing income growth by a significant margin and, as a result, housing affordability is already less favourable than was the case before the pandemic struck.”