UK house prices rose for the third month in a row in November, according to the latest figures from Nationwide Building Society.
Prices increased 0.2% month on month in November, taking the average UK house price to £258,557. Analysts had expected prices to contract 0.4%. House prices are still down 2% compared with a year ago, but the fall is not as dramatic as many experts predicted.
Robert Gardner, Nationwide’s chief economist, said: “UK house prices rose by 0.2% in November, after taking account of seasonal effects. This was the third successive monthly increase and resulted in an improvement in the annual rate of house price growth from -3.3% in October, to -2.0%. While this remains weak, it is the strongest outturn for nine months.
“There has been a significant change in market expectations for the future path of bank tate in recent months which, if sustained, could provide much needed support for housing market activity. In mid-August, investors had expected the Bank of England to raise rates to a peak of around 6% and lower them only modestly (to circa 4%) over the next five years. By the end of November, this had shifted to a view that rates have now peaked (at 5.25%) and that they will be lowered to around 3.5% in the years ahead.”
Tom Bill, head of UK residential research at Knight Frank, said: “If we are not at the bottom of the current slowdown in the UK housing market, we must be close. Price indices are potentially more volatile due to low transaction numbers but sentiment has improved in recent weeks as the worst of the economic data moves behind us.
“Inflation is below 5%, the best five-year fixed-rate mortgage has fallen to less than 4.5% this week and speculation is focussed on the timing of the next rate cut not the size of the next rise. After a flat autumn, the UK housing market should see a spring bounce in 2024 provided a general election is not called in the first half of next year.”
