MortgagesNov 27 2015

House price growth slows in November: Nationwide

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House price growth slows in November: Nationwide

House price growth weakened in November, according to a Nationwide survey.

The building society said house prices were 3.7 per cent higher than a year earlier in November with an average price of £196,305, down from growth of 3.9 per cent in the previous month.

This is a monthly change in growth between November and October of 0.1 per cent.

According to Nationwide, the annual rate of house price growth has fluctuated in a fairly narrow range between 3 per cent and 4 per cent over the last six months, which it said is “broadly consistent” with earnings growth over the longer term.

Robert Gardner, Nationwide’s chief economist, said: “While this bodes well for a sustainable increase in housing market activity in the period ahead, much will depend on whether building activity can keep pace with increasing demand.

“Surveyors have continued to report a dearth of properties on the market in recent months, with the number of available homes reportedly at the lowest level since the late 1970s.

“Therefore it is positive that policymakers are focusing on the need to increase home building, with the chancellor announcing a range of measures aimed at boosting housing supply in his Autumn Statement.”

However, Alex Gosling chief executive of online estate agents HouseSimple.com, disputed this, arguing that chancellor George Osborne failed to address the problem facing the housing market today.

He said: “Demand continues to massively outstripping supply. We have an immediate supply crisis in the UK and it’s hard to see how home builders can build houses fast enough to free up the demand-supply bottleneck.

“We need measures to stimulate the housing market and it can’t be just about building more homes to meet demand in the future. Sellers need to be encouraged back to the market.”

With homeowners finding it harder to climb up the property ladder, Mr Gosling suggested people are renovating and extending rather than moving.

“Price growth is unlikely to cool in the coming months, especially with more investors expected to come to the market to buy before the new buy-to-let stamp duty rates come into force.”

Jonathan Adams, director of London estate agency Napier Watt, pointed to the average London house price, which now tops half a million pounds.

“First-time buyers looking for more modest properties are increasingly unable to buy without considerable help from the Bank of Mum and Dad,” he said. “However, the announcement of the London Help to Buy scheme in the Autumn Statement will go some way to helping first-time buyers onto the housing ladder.

Mr Adams said: “We fully expect property price growth to accelerate over the next few months as landlords and second homeowners bring forward their decision to buy in order to avoid paying an extra 3 per cent stamp duty from April onwards.

“Unless there is a significant increase in stock coming to market to absorb this increased demand, which at the moment looks unlikely, prices will continue their upward trajectory.”

katherine.denham@ft.com