Nationwide house price index: Annual growth rate picked up in October

 
Caitlin Morrison
Follow Caitlin
Communities Rebuild Areas Of Anti-Social Behaviour
House price growth was up again in October (Source: Getty)

The annual rate of house price growth rose to 2.5 per cent in October, from 2.3 per cent in September, according to the latest Nationwide house price index.

Prices went up 0.2 per cent on a monthly basis, down slightly from 0.4 per cent growth in the previous month.

Nationwide's chief economist Robert Gardner 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."

Gardner noted the increasing likelihood of a rate rise tomorrow, but said he expects this to have a "modest" impact on most UK households.

"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 said.

However, Gardner added: "“That’s not to say that the rise will be welcome news for many borrowers. Household budgets are under pressure from the fact that wages have not been rising as fast as the cost of living. Indeed, in real terms (i.e. after adjusting for inflation) wage rates are still at levels prevailing in 2005."

Russell Quirk, founder and chief exec of eMoov.co.uk, said: "Despite a number of significant, testing events the UK property market and the economy as a whole have shown an air of defiance and both outperformed wider negative predictions.

"With a slow but consistent recovery from such detrimental proceedings as the EU referendum and the shambolic snap election, it is unlikely that any marginal increase in interest rates that may come this week will stifle this growth.

"Not only will any rates rise seen this week be financially palatable for UK homeowners, a swelling population both native and from abroad, coupled with a severe lack of building stock being built, will see prices remain inflated to do the imbalance between supply and demand."

Related articles