Nationwide the worlds largest building society and mortgage provider , has just updated its UK, house price index report >
- UK house prices increased by 0.5% in September
- UK annual house price growth increased to 3.8% in September
- London house price growth increased to 10.6% in Q3
Commenting on the figures, Robert Gardner, Nationwide's Chief Economist, said:
“UK house prices increased by 0.5% in September, with the annual pace of house price growth picking up modestly to3.8%, from 3.2% in August.
“The data in recent months provides some encouragement that the pace of house price increases may be stabilising close to the pace of earnings growth. However, the risk remains that construction activity will lag behind strengthening demand, putting upward pressure on house prices and eventually reducing affordability.
“Indeed, in recent months surveyors have reported historically low levels of properties for sale and increased new buyer enquiries. Therefore it is unsurprising that most surveyors expect a pickup in house price growth in the months ahead.
London continues to outpace rest of UK
“The slowdown in house price growth since the middle of 2014 has not been confined to, nor has it been driven primarily by, developments in London. Indeed, the capital. has continued to see price growth at or above the rate in the UK overall over the past four quarters.
The annual rate of price growth in London is currently the highest in the country and actually accelerated to 10.6% in Q3, up from 7.3% in Q2.
“The gap between London house prices and the rest of the UK has continued to reach new highs (see chart below).
London leads regional house price growth There was a mixed picture across the regions in Q3. The rate of annual house price growth accelerated in Southern England, particularly in London, but continued to slow in the Midlands and most Northern areas.
London was the strongest performing region, with average prices up 10.6% year-on-year, up from growth of 7.3% in Q2. Annual price growth also accelerated in the neighbouring Outer Metropolitan region from 6.8% to 9.5%. The North West was the weakest performing English region, with prices down 0.6% year-on-year. House prices continue to recover in Northern Ireland, with annual growth of 6.5% in Q3, although average prices are still 44% below their pre-crisis peak.
Wales saw a 1.9% year-on-year increase in average prices, a slight improvement compared with recent quarters. Scotland was the weakest performing region for the second quarter in a row, with a 1.3% year-on-year fall, similar to the 1% annual decline recorded in Q2.
North / South divide widens in England
Average house prices in England increased by 1.8% in Q3, and were up 6.0% year-on-year.
Price growth in the South exceeded that in the North for the 26th consecutive quarter. Prices in Southern England (South West, Outer South East, Outer Metropolitan, London and East Anglia) were up 8.0% year-on-year, whilst in Northern England (West Midlands, East Midlands, Yorkshire & Humberside, North West and North) prices rose by just 1.0%.
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