Nationwide BS 

November sees uptick in house price growth

November sees uptick in house price growth

Annual house price growth picked up in November but remained relatively subdued at 1.9 per cent, according to the Nationwide house price index.

The index showed house price growth had gone up from 1.6 per cent in October, with the average house now worth £214,044.

One a month-to-month basis, house price growth picked up from 0 per cent in October to 0.3 per cent in November.

Robert Gardner, Nationwide’s chief economist, said: "Looking forward, much will depend on how broader economic conditions evolve.

"In the near term, the squeeze on household budgets and the uncertain economic outlook is likely to continue to dampen demand, even though borrowing costs remain low and the unemployment rate is near 40-year lows."

He said there was scope for activity to pick-up through next year if this uncertainty lifts in the months ahead and employment continues to rise.

"The squeeze on household incomes is already moderating and policymakers have signalled that, if the economy performs as they expect, interest rates are only expected to rise at a modest pace and to a limited extent in the years ahead."

Lucy Pendleton, founder and director of independent estate agent James Pendleton, said: "The lender’s prediction of a 1 per cent increase in house prices in 2018 is starting to look a little shaky on paper but, in truth, there’s not actually much in it."

She warned that the average house price will only have to drop £776 over the next month "for them to be right on the money."

She said: "It takes a brave economist to make public predictions like this and a sizeable chunk of political uncertainty thanks to Brexit may well have helped this one stand the test of time."

The index showed housing supply had improved. After falling by almost 60 per cent in the wake of the financial crisis, there has been a significant pick up in construction in recent years, Mr Gardner explained.

New build completions in England in 2017/18 reached 195,300, around 3 per cent below 2007/08 levels.

"Moreover, the picture improves further if we add in additional dwellings that have been created by converting larger homes into more units and those created by ‘change of use’, such as turning former offices into flats," Mr Gardner said.

Net additions to the housing stock were now just 0.6 per cent below 2007 levels.

Venilia Batista Amorim is a freelance writer for FTAdviser