Latest News

  • The Daily Telegraph

    Bank of England warns of tougher curbs on mortgage lending

    The Bank of England has warned that obtaining a mortgage is about to become even more difficult.

    by Myra Butterworth

News Article


House prices up by 0.1%, says Nationwide

Nationwide says property market prices edged up this month, taking average value of a home to £166,757

by Jill Insley

House prices edged up by 0.1% in September, according to the Nationwide building society, stabilising the cooling market experienced by sellers during the summer.

The average price crept up by £250 to £166,757 from the previous month, leaving the annual rate of house price inflation at 3.1%, down from 3.9% in August and 6.6% in July.

A comparison of the last three months with the same period last year, regarded as a more accurate indication of house price movement, turned negative for the first time since May 2009, falling from 0% in August to -0.9% in September.

Martin Gahbauer, Nationwide's chief economist, said that while September proved to be an uneventful month for house prices, the fall in the three-month rate of change was "consistent with the clear loosening of housing market conditions observed over the summer months".

But he added: "Although the three-month rate of change has turned negative, at this stage it is not pointing to a significant pace of decline in property values. During the 2008 downturn in house prices, the three-month rate of change dropped as low as -5.1%, well below the current level. Nonetheless, buyers appear to have a slightly better hand than sellers at the moment, as the market continues to absorb the recent increase in property for sale."

Gahbauer said the future direction of house prices would depend on whether the strong flow of new properties being put up for sale continued into the autumn, and on the extent to which sellers were prepared to compromise on asking prices to make a quicker sale.

"Many of the new sellers who have marketed their properties may indeed be speculative sellers testing the market in response to the price gains seen since early 2009 and the abolition of home information packs. If this is the case, and there is little urgency to sell for financial or other reasons, then prices may remain more or less stable, albeit at the expense of market activity," he said.

Howard Archer from IHS Global Insight said: "Essentially flat house prices in September, following significant drops in August and July, does not materially change our view that house prices will trend gradually lower over the final months of 2010 and in 2011. Overall, we expect house prices to fall by 10%.

"House prices are often volatile from month-to-month and attention should be focused on the underlying trend rather than on one month's figures. And a 0.1% rise in house prices following drops of 0.8% and 0.5% in the previous two months is hardly a robust performance."

Data from the Land Registry published on Tuesday also indicated a slowing down of the housing market: although prices rose by an average of 0.3% in August, this was very slightly down on the 0.4% increase experienced in July.

The Bank of England also said yesterday that approvals for new home loans dipped to their lowest level in six months in August.

Richard Sexton, business development director at chartered surveyors e.surv, said: "The market is still very delicate at the moment. House prices certainly aren't going to skyrocket while people are mulling over the potential impact of the austerity measures the chancellor is planning."