9:12 AM, 1st December 2023, About 12 months ago
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UK house prices have increased for the third consecutive month in November, according to Nationwide, the country’s largest building society.
The monthly rise of 0.2% was lower than the 0.9% increase in October but higher than the 0.1% increase in September.
This is the first time since summer last year that property prices have risen for at least three months in a row.
However, homeowners have seen the average price of their property drop by 2% year on year in November.
That is the smallest annual decline in nine months and an improvement from the 3.3% fall in October.
The average price of a home in the UK was £258,557 in November, which is £5,231 lower than the same month last year.
Nationwide attributed the improvement in the housing market to the expectation that mortgage costs have reached their peak which has boosted the confidence and activity of buyers and sellers.
The lender’s chief economist, Robert Gardner, 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.”
He added: “There has been a significant change in market expectations for the future path of Bank Rate in recent months which, if sustained, could provide much needed support for housing market activity.”
Sarah Coles, the head of personal finance at Hargreaves Lansdown, said: “This looks like a welcome bump for the market, but it’s not quite as positive as it seems.
“A dearth of homes for sale has put a floor under prices, which rose slightly during November. But life remains tough for sellers.
“Prices are on the up for the third successive month, which feels like good news.
“However, in order to get these higher prices, you have to actually sell your home – which is easier said than done.
“Sales have slowed to a crawl. October figures out this week from HMRC showed property sales were down a fifth in a year.”
Marc von Grundherr, a director of Benham and Reeves, said: “It’s been a strange and uncertain year for the UK property market and so it’s only fitting that house prices should start to rally at a time of year when we usually see a seasonal lull.
“Home sellers will rejoice at the strongest house price performance in nine months and, with mortgage market activity also starting to increase, the current outlook is very positive indeed.
“However, those who have so widely prophesied the demise of the market over the last year will no doubt turn green with Grinch like fury having been proven wrong once again.”
The chief executive of Octane Capital, Jonathan Samuels, said: “Higher mortgage rates have been the key factor impacting property market performance of late.
“However, the decision to hold the base rate at 5.25% has helped stabilise the market and swap rates have been reducing consistently as a result.
“With buyers now confident that their mortgage terms are only likely to change for the better, we’ve seen an almost immediate increase in the number entering the market in the form of a mortgage approval uplift.”
He added: “This is also starting to help push house prices in the right direction and while the current rate of growth may seem insignificant, it’s only a matter of time before this market momentum starts to snowball.”
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