October saw house prices in the UK rise for the sixth month in a row according to latest figures released today by Nationwide. The average house price in October stood at £162,038 – up from £161,816 in the preceding month and 2.0% higher than the figure of £158,872 recorded in October 2008.
There were signs that the rate at which home values are rising is easing however thanks in part to an increase in the supply of new homes being brought to the market by prospective sellers.
Commenting on the results Martin Gahbauer, Nationwide’s chief economist, said: “House prices rose for a sixth consecutive month in October, but the strong upward momentum in property values over the summer is showing some signs of moderating as we head into the autumn months. The price of a typical property was 0.4% higher on the month in October, compared to an increase of 0.9% in September and 1.4% in July and August.
A moderation in the rate of house price inflation was to be expected, as the very strong monthly increases seen over the summer months was unlikely to be sustainable over the long run.”
The Nationwide report also pointed to a shift in consumers’ house price expectations with the recent stability in prices having raised expectations.
Mr Gahbauer explained: “Over the course of 2009, consumer expectations of house price inflation have steadily risen and are now consistent with stable to slightly positive house price inflation in the near term. For most of the year, actual house price inflation has been broadly consistent with the development of consumer expectations. In the most recent months however, it appears that actual house price inflation has moved somewhat ahead of what was indicated by consumer expectations. This could signal a period of moderation in house price inflation ahead, which is fully consistent with October’s less pronounced increase in prices.”
David Marshall, business analyst with ESPC concluded: “These figures provide further evidence to suggest that prices over the remainder of 2009 will be broadly in line with levels witnessed towards the end of last year. The rapid inflation we were witnessing at a UK level during the summer months would not have been beneficial to the long-term health of the market so a return to more modest growth should help support prolonged market stability.”