House prices in the UK experienced modest growth of 0.2 per cent between October and November, as reported by mortgage provider Nationwide.
This follows a 0.9 per cent expansion in the previous month and a marginal rise in September. Contrary to economists' expectations of a 0.4 per cent fall, the data suggests a stabilising trend in the housing market. The Nationwide house price index is a timely indicator of the property market, influencing the wider economy through house-related spending. Official data on November prices is set to be published in January.
Bank of England figures earlier in the week revealed an unexpected three-month high in mortgage approvals in October. The recent Nationwide data indicates a potential easing in the housing market, which has experienced a slide in prices and sales since the summer of 2022.
Market expectations have shifted from anticipating a peak Bank of England interest rate of 6 per cent to now widely expecting borrowing costs to remain at the current level of 5.25 per cent, with potential rate cuts from next year. The average house price in November was £258,600, down from a peak of £273,500 in August last year.
In a separate development, the Office for National Statistics revised upwards the annual rate of UK rental prices in October from 6.1 per cent to 8.4 per cent, the highest since data collection began in 2016. The new methodology for calculating rental price growth indicated a 10 per cent increase in London in the year to October, compared to a previous estimate of 6.8 per cent.
