House prices bump up in November, Nationwide index shows

House prices bump up in November, Nationwide index shows

House prices nudged up slightly in November after flat-lining during the previous month, according to figures from Nationwide.

The building society’s monthly annual house price index showed UK house prices had bumped up 0.1 per cent in November, after making no movement in October.

Looking over the year, however, the annual rate of house price growth slowed slightly to 4.4 per cent from 4.6 per cent in October.

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Of course this still marks a jump in price, and according to Nationwide, this increase is in line with the growth rates prevailing since early 2015.

Despite the uncertain economic outlook, Robert Gardner, Nationwide's chief economist, said there are some signs that demand conditions have strengthened a little in recent months.

He said this reflected the impact of “solid” labour market conditions and historically low borrowing costs. 

Figures also revealed the average price of a UK home now stands at £204,947, down slightly from October’s average of £205,904.

Yet mortgage approvals increased in October, and Nationwide data found fixed rate mortgages have remained the most popular product type.

Data from the Council of Mortgage Lenders indicates that over the past twelve months more than 90 per cent of new mortgages were contracted on fixed rates, which Mr Gardner said could be driven by a desire to “lock in” record low interest rates.

The proportion of new mortgage lending contracted on fixed rates has increased considerably since the low point in 2010, when less than half of lending was on fixed rates, he said.

Surveyors report that new buyer enquiries have increased modestly.

In his Autumn Statement, chancellor Philip Hammond promised to address the UK’s housing shortage by spending £3.7bn and building 140,000 homes by 2021.

Part of this comes from a new £2.3bn Housing Infrastructure Fund to deliver infrastructure for up to 100,000 new homes in areas of high demand.

A further £1.4bn will be invested to deliver 40,000 affordable homes.

Mr Gardner added: “The low number of homes on the market and modest rates of housing construction are likely to keep the demand/supply balance fairly tight in the quarters ahead, even if economic conditions weaken, as most forecasters expect.” 

Jeremy Leaf, London estate agent, said: “The numbers are not particularly exciting because they are showing a market which is slowing down prior to the Christmas period."

He said the figures reflect the struggle between those trying to take advantage of very low interest rates and softening house prices, versus those showing caution in view of the economic and political uncertainty. 

“The result is modest house price increases mainly because of the continuing shortage of supply.”