UK House Prices Rise Unexpectedly On Supply Constraints: Nationwide

UK house prices unexpectedly climbed in October due to a shortage of properties amid the robust labor market conditions, data from the mortgage lender Nationwide Building Society revealed Wednesday.

House prices posted a monthly growth of 0.9 percent in October, following a 0.1 percent rise in September. This was the highest since August 2022, when the rate of increase was the same. Prices were expected to drop 0.4 percent.

On a yearly basis, house prices decreased 3.3 percent. The annual fall was less severe than September’s 5.3 percent decline. Economists had forecast a 4.8 percent drop.

Still, housing market activity remained extremely weak, Nationwide Chief Economist Robert Gardner said.

Housing affordability remains stretched. Market interest rates moderated somewhat but they are still well above the lows prevailing in 2021, the economist pointed out.

Gardner said activity and house prices are set to remain subdued in the coming quarters. Despite signs that cost-of-living pressures are easing, consumer sentiment remains weak and surveyors continue to report subdued levels of new buyer inquiries.

Data from the Bank of England this week showed that net mortgage approvals for house purchases fell to 43,300 in September from 45,400 in August.

The BoE had paused its policy tightening in September after raising the interest rate at each and every rate-setting meeting since December 2021.

At 5.25 percent, the interest rate was the highest since early 2008. The bank is likely to keep the rate unchanged again at 5.25 percent on November 2.

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