Nationwide: November house prices bounce after Budget blip

Property prices rose by 1.2% in October after dipping in September, Nationwide’s November House Price Index has revealed.

This has brought annual house price inflation to 3.7%, up from 2.4% in September.

The average UK house price currently stands at £268,144, just 1% below the record highs recorded during the pandemic.

Sarah Coles, head of personal finance, Hargreaves Lansdown, said:

“We’ve seen a pick-up in activity from landlords, who put sales in train before the Budget.

“They may not have had the capital gains tax blow they were expecting in the speech, but given that the Treasury is still more likely to hike taxes for landlords than to cut them in the next few years, there’s a decent chance many of them have decided to get out anyway, while they know where they stand.

“More properties for sale will have spurred more buyers into action, especially in areas where a lack of choice had been holding them back.

“We had an indication this could be the case from the Bank of England, as mortgage approvals for new purchases had risen in October – to the highest point since August 2022.

“We’re getting back into solid pre-pandemic territory, with 68,300 approvals.

“We might well see activity remain higher in the coming months, as buyers hurry to get in ahead of the end of the stamp duty holiday on 31 March.

“However, as prices head to just 1% below their peak, and mortgage rates remain relatively high, there’s a growing chance that affordability raises its ugly head again.

“This could keep a lid on both sales and prices, as it just becomes too big a stretch to get onto the property ladder – or move up it.”

However, Mark Harris, chief executive of mortgage broker SPF Private Clients, reckons activity could drop in the months ahead.

Harris said:

“Inflation creeping back up is not the required backdrop for aggressive rate cuts, and with the Budget expected to fuel inflation further, this may slow down activity in the market as hard-pressed borrowers who are struggling with affordability wait for rates to come down further.

“Swap rates have slipped back in the past few days but most lenders are still repricing upwards. 

“Borrowers looking for a mortgage should speak to a whole-of-market broker to find the best deal available to them.”

Kindly shared by Property Wire