UK house prices will stand up to slowdown says Nationwide
A shortage of homes and record low borrowing costs will keep house prices relatively high in the months ahead despite a cooling economy, lender Nationwide said today.
Its latest index showed average house prices creeping up 0.1% in November, slowing the annual rate of growth to 4.4% and leaving the average UK home costing £204,947.
The building society’s chief economist Robert Gardner said: “Despite the uncertain economic outlook, demand conditions have strengthened a little in recent months, reflecting the impact of solid labour market conditions and historically low borrowing costs.”
Bank of England figures this week showed the average cost of new mortgage lending down to a new all-time low of just 2.16% in October.
Gardner added: “The relatively 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.”
However, economists predict a difficult 2017 for the housing market as inflation bites and jittery consumers ease back on big-ticket purchases.
Market research firm GfK said this week that consumer confidence had fallen to the lowest levels since the immediate aftermath of the Brexit referendum.
