House prices rise slightly as market shows resilience – Nationwide

House prices edged slightly higher in October as the property market continued to display resilience despite wider economic pressures.

Nationwide’s latest House Price Index reveals that annual growth was up 2.4%, from 2.2% in September.

Robert Gardner, Nationwide’s chief economist, said: “The housing market has remained broadly stable in recent months, with house prices rising at a modest pace and the number of mortgages approved for house purchase maintained at similar levels to those prevailing before the pandemic struck.

“Against a backdrop of subdued consumer confidence and signs of weakening in the labour market, this performance indicates resilience, especially since mortgage rates are more than double the level they were before Covid struck and house prices are close to all-time highs.”

Mr Gardner is predicting that house prices will rise ahead of wage growth and affordability will improve.

Property sector reaction to Nationwide’s HPI

Guy Gittins, Foxtons’ chief executive, said: “The latest Nationwide figures suggest that the housing market momentum has remained steady, with further upward price growth on both a monthly and annual basis reflecting cautious confidence within the market.

“With inflation holding firm at 3.8% for the third consecutive month, the prospect of a base rate cut before Christmas remains on the table.

“This will only help to boost current market sentiment, so any ‘wait-and-see’ approach adopted by buyers ahead of the upcoming Autumn Budget is likely to be short lived.”

Director of Benham and Reeves, Marc von Grundherr, said: “The UK property market continues to demonstrate the remarkable resilience that has been the theme throughout this year, with buyers still motivated and transaction activity holding firm.

“London, in particular, remains an ever-present source of strength, proving that even in the face of political and economic jitters, the capital’s market refuses to be spooked.”

Nathan Emerson, the chief executive at Propertymark, said: “As the year continues to unfold, we have seen challenges and achievements in almost equal measure.

“It is positive for those on the housing ladder to see them accumulate more equity.

“However, the flip side is that it remains ever more demanding for first-time buyers to attain a foothold on their housing journey.”

Karen Noye, a mortgage expert at Quilter, said: “After a subdued first half of the year, the housing market appears to be finding its feet.

“A gentle uptick in prices reflects a degree of confidence returning among buyers and sellers, supported by greater stability in mortgage rates and growing expectations that interest rates have now peaked.

“However, the optimism remains fragile.

“With the Budget looming and rumours swirling about possible housing tax changes, many buyers are taking a cautious approach, waiting to see whether the goalposts are about to shift.”

Tom Bill, the head of UK residential research at Knight Frank, said: “Mortgage rates have been stable for a number of months, which has supported demand and put upwards pressure on house prices.

“However, a two-speed market has been created as the Budget approaches, with prices falling in higher-value areas due to uncertainty over property taxes.

“The risk is that momentum is gradually sapped from the wider market after 26 November.”