UK house price growth picks up in October, Nationwide says

LONDON (Reuters) – British annual house price growth edged up to a three-month high in October, mortgage lender Nationwide said on Wednesday, although the outlook for the housing market remained subdued.

House prices rose 2.5 percent on the year compared with 2.3 percent in September. Analysts polled by Reuters had predicted house price inflation would slow to 2.2 percent.

On the month, prices rose 0.2 percent, Nationwide said.

Howard Archer, chief economic adviser to the EY ITEM Club consultancy, said he was sceptical about the prospect of any marked upturn in the housing market.

“Housing market activity remains under pressure from squeezed consumer purchasing power, fragile confidence and appreciable caution over engaging in major transactions,” he said.

“A likely Bank of England interest rate hike on Thursday may very well also weigh down on housing market activity.”

The BoE is widely expected to raise rates from 0.25 percent to 0.5 percent at this week’s meeting.

Nationwide said such a rise would probably have only a modest effect on borrowers with a variable rate mortgage, with monthly payments on the average mortgage likely to rise by 15 pounds.

Kindly shared by Reuters