The latest Nationwide House Price Index reveals that UK house prices are continuing on their steady ascent, albeit at a slower rate than before.
The house price rise between October and November was only fairly incremental at 0.1%, but follows the trend of rising prices that has become the norm.
Year-on-year, the rise was 2.5%, which is down on the year-on-year comparison for October at 4.4%.
Robert Gardner, Nationwide’s chief economist, said: “Low mortgage rates and healthy rates of employment growth are providing support for demand, but this is being partly offset by pressure on household incomes, which appears to be weighing on confidence. The lack of homes on the market is providing support to house prices.”
The abolition of stamp duty on homes up to £300,000 for first-time buyers is only likely to have a modest impact to start with, as demand is still high, Nationwide says. Critics say the changes in the Budget could actually have the effect of pushing house prices up further.
Looking ahead
Next year is likely to see the trend continue, according to Jonathan Hopper of Garrington Property Finders.
“Looking ahead into 2018 it’s likely we’ll see much of the same,” he said. “Limited supply will nudge up average prices nationwide, but with falling real wages eating into what buyers can afford, it’s sellers who are willing to be pragmatic on pricing who are most likely to achieve a sale.”
Research by Halifax earlier this month revealed that the total value of UK property had now reached £6trn, with London homes alone worth as much as £1.3trn – the total combined value of Scotland, Wales and the north of England.
The government is trying to shorten the supply and demand gap in housing by building 300,000 new homes a year, although critics have said that this target will not be met unless other changes are made.
David Orr, chief executive of the NHF, said: “There are a range of useful measures in the Budget, which will have a combined effect of seeing some, I would think, relatively small incremental change and seeing some relatively small growth in the number of new homes built. If we’re going to get to 300,000 new homes a year, we need, I think, quite muscular government action on the supply of land.”
