Housing market remains ‘fairly stable’: Nationwide
Economist predicts UK economy will see a “gradual recovery” over the next twelve months, with house prices remaining relatively flat.
The average UK house price is now £163,964, after declining 0.4 per cent in September following a 1.1 per cent rise in August, data from Nationwide’s monthly house price index have revealed.
According to Nationwide, monthly price changes have been affected by a number of one-off factors this year, such as the ending of the stamp duty holiday that cannot be controlled by the usual process of seasonal adjustment.
Robert Gardner, chief economist at Nationwide, highlighted that for this reason the annual rate of house price change is a better guide to the state of the market at present. On that basis the housing market remains “fairly stable”, with prices 1.4 per cent lower than September 2011.
He added that policy measures such as the Bank of England’s Funding for Lending Scheme should provide support for activity in the housing market by ensuring the availability of credit and lowering its cost.
Overall, Nationwide expects the UK economy to see a gradual recovery over the next twelve months, with house prices remaining relatively flat or declining only modestly over the same period.
Mr Gardner said: “However, labour market developments will remain of paramount importance in deciding the trajectory of house prices. There are grounds for caution on this front, as the unusual combination of rising employment and declining economic activity that was evident in the first half of 2012 is unlikely to be sustained.
“But there are encouraging signs that the UK will soon return to modest growth. The Olympics are likely to have delivered a boost that will almost certainly bring the recession to an end in Q3.”