Nationwide says housing market ‘continues to soften’

Frances colour

The annual pace of house price growth has slowed for the third consecutive month, according to the UK’s second biggest mortgage lender.

House price inflation fell to 8.5% in November on an annual basis, down from 9.0% in October according to Nationwide.

Prices rose by 0.3% in November from the month before, compared with an increase of 0.5% in October.

The increase took the average price of a property up to £189,388, Nationwide said.

“The annual pace of house price growth continued to soften in November, falling from 9.0% in October to 8.5%, marking the third consecutive month where annual growth has moderated,” said Robert Gardner, Nationwide’s chief economist.

“Housing market activity levels have remained relatively weak in recent months.”

Nationwide pointed to a disconnection between house price growth and economic indicators in the rest of the UK economy.

“In particular, the labour market has continued to improve, with employment rising strongly and the unemployment rate falling sharply in recent months,” Mr Gardner said.

“Moreover, indicators of consumer sentiment remain elevated, where healthy rates of retail sales growth and new car registrations also suggest that households are feeling more confident,” he said.

House price inflation is expected to continue to soften in the short term, but should pick back up in the longer term if the economy remains in good shape and mortgage rates don’t rise sharply, he added.