You are here: Home -

House prices inched up in October

0
Written by:
01/11/2017
House prices inched up in October

The average UK property price rose by a slim 0.2% in October, according to Nationwide, taking the annual rate of house price inflation to 2.5%, up from 2.3% in September.

The average price of a property is now £211,085, said the lender.

Robert Gardner, Nationwide’s chief economist, noted that annual house price growth stayed within the 2-4% range, where it has hovered since March.

He said: “Low mortgage rates and healthy rates of employment growth are providing some 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.”

Potential rate rise

Gardner also acknowledged the increasing likelihood of a Base Rate rise, but said most households would only face a modest impact.

“The proportion of borrowers directly impacted by a rate rise will be smaller than in the past, in part because the vast majority of new mortgages in recent years were extended on fixed interest rates,” he explained. “The share of outstanding mortgages on variable rates (and which are therefore likely to see an increase in payments if the Bank Rate is increased) has fallen to a record low of around 40%, down from a peak of 70% in 2001.”

Jonathan Samuels, CEO of Octane Capital, added: “While a potential quarter point interest rate rise this week will be manageable, it’s the impact on sentiment that is the unknown.

“There is no reason to think the first rate rise for a decade will trigger a property market meltdown, especially given that so may people are on fixed rate mortgages, but it does bring another element of uncertainty into play.

“Hard numbers aside, rates rising for the first time in a decade will be a symbolic moment and could give prospective buyers more pause for thought, especially with the cost of living so high.”

Nationwide noted that on the average mortgage, an increase of 0.25% would increase monthly payments by £15 to £665 (equivalent to £180 per year). 
 

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Save money now!

See how much you could potentially save by remortgaging to a different product

Your Mortgage Guides

Guide to Offset Mortgages

Download our handy guide to offset mortgages, brought to you in partnership with Scottish Widows Bank

Read More >

How much can you borrow?

A calculator designed to help you understand how much you can borrow towards your property
Read previous post:
2358131-slow-sign
Where is the UK’s most sluggish housing market?

Nearly one in three homes on the market in this area have been up for sale for over six months

Close