Nationwide: UK house prices flat in September, down 5.3% year-on-year
House prices in the UK were flat month-on-month in September, but still down 5.3% year-on-year, according to the Nationwide House Price Index.
Prices defied expectations of a 0.4% monthly fall, after a sharp decline in August as the impact of higher interest rates finally appeared to be taking hold.
The average house price is £257,808, according to Nationwide.
In London, house prices fell more slowly, at 3.8% year-on-year, with the average home costing £514,325. That’s a more gentle decline than in June whe the regional index was last published.
Robert Gardner, Nationwide’s Chief Economist, said:
“Housing market activity remains weak, with just 45,400 mortgages approved for house purchase in August, c.30% below the monthly average prevailing in 2019 before the pandemic struck. This relatively subdued picture is not surprising given the more challenging picture for housing affordability. For example, someone earning an average income and purchasing the typical first-time buyer home with a 20% deposit would spend 38% of their take home pay on their monthly mortgage payment – well above the long-run average of 29%.
“However, investors have marked down their expectations for the future path of Bank Rate in recent months amid signs that underlying inflation pressures in the UK economy are finally easing, and with labour market conditions softening.
“This in turn has put downward pressure on longer term interest rates which underpin fixed rate mortgage pricing (see chart below). If sustained, this will ease some of the pressure on those remortgaging or looking to buy a home.”
Recap: Friday’s top stories
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