Investing.com — British house prices were flat in October, extending a six-month stall that has left them almost 2% below their April peak, as investors bet the Bank of England’s next move is a rate rise, mortgage lender Nationwide said on Friday.
House prices were broadly unchanged in October, while annual growth slowed to its weakest pace since January 2024, as inflation concerns and expectations of higher interest rates weighed on buyer demand, Nationwide’s house price index showed.
The seasonally adjusted monthly change was -0.0% in October, compared with a 0.3% decline in September.
The average house price, on an unadjusted basis, stood at £273,566 in October, down from £274,251 in September and £278,880 in April.
Annual house price growth slowed to 0.5% in October from 0.8% in September, marking its weakest rate since January 2024. Growth had stood at 3% in April.
The three-month-on-three-month change was -0.2% in October, compared with a decline of 0.4% in September.
“Geopolitical tensions remain high, with the conflict in the Middle East exerting upward pressure on energy prices, fanning inflation concerns,” said Nationwide Chief Economist Robert Gardner in a statement.
This had led to growing financial market expectations of Bank Rate increases, keeping upward pressure on the interest rates that influence mortgage pricing, he added.
Surveyors have reported that new buyer enquiries remain weak, while households became less optimistic in October about the economic outlook and their own financial prospects over the coming year, Gardner added.
“Forward-looking indicators suggest further softness in the near term,” he said.
However, Gardner said there were reasons to expect the housing market to regain momentum once the energy price shock subsides.
Employment and real incomes remain resilient, while household debt is close to a 20-year low relative to disposable income.
He added that the improvement in housing affordability over the past two years had been only partly reversed by higher market interest rates, as income growth had significantly outpaced house price growth.
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