House price growth slows in October
House prices were unchanged month on month in October, according to Nationwide, with the average UK property price maintained at £205,904.
This pulled back annual house price growth to 4.6% from 5.3%, a slight dip but still in line with the overall annual growth rates seen since the beginning of 2015, according to the lender.
Robert Gardner, Nationwide’s chief economist, said: “UK house price growth has been remarkably stable over the past 18 months, averaging around 5%. While this is relatively modest by UK standards, it is still well in excess of average wage growth. Indeed, over the past three years, house prices increased by around 20% while wages have risen by approximately 6%. As a result, the typical house now costs six times average earnings, up from 5.3 times earnings in 2013.
“However, the steady decline in borrowing costs over the same period has helped to lessen the impact on affordability for home buyers. Indeed, the typical mortgage payment expressed as a share of average take home pay is little changed over the period and is still in line with the long-run average.”
Alex Gosling, CEO of online estate agents HouseSimple.com, added: “There have been signs for a few months that the property market might be running out of steam, and in October the inevitable happened.
“This is not the time to press the panic button because it’s unlikely that prices are about to start tumbling. The labour market is strong, supply is still low and buyer confidence hasn’t dissipated. There are still plenty of people looking to purchase, but it just feels like an over-priced market has finally taken its toll. Property transactions are down on levels we would normally expect this time of the year and it may be that buyers are simply taking a breather until the New Year.”