Annual house price growth slowed in October, according to the latest Nationwide House Price Index. It fell from 5.3% in September to 4.6% last month.
On a monthly basis, house prices remained unchanged in October – the first time in fifteen months that an increase in house price rises hasn’t been witnessed. The lack of month-on-month increase helped to cause the slowdown in annual house price growth.
Robert Gardner, Nationwide’s Chief Economist, said of the findings: “Measures of housing market activity remain fairly subdued, with the number of residential property transactions 10% below the levels recorded in the same period of 2015 in recent months.”
He added: “However, this weakness may still in part reflect the after-effects of the introduction of stamp duty on second homes introduced in April, where buyers brought forward transactions to Q1 to avoid additional stamp duty liabilities. Policy changes impacting the Buy to Let market may also be playing a role in dampening activity.”
Demand conditions, however, are expected to stay broadly steady in the short-term. Mortgage approvals edged up slightly in September while surveyors have been recording a modest growth in new buyer enquiries in recent months.
Gardner believes that, despite the uncertain economic outlook, solid labour conditions and historically low borrowing costs should provide wary buyers with plenty of confidence.
The demand/supply issue, meanwhile, is expected to remain fairly tight thanks to the low number of properties on the market and the low levels of housebuilding.