UK Nationwide House Price Growth Softens

(RTTNews) - UK house prices increased at a slower pace in October as buyers became cautious ahead of the budget, data from the Nationwide Building Society showed Friday.

House price posted a monthly growth of 0.3 percent in October, slower than the 0.5 percent rise seen a month ago. Nonetheless, the figure was better than the forecast of nil growth.

On a yearly basis, house price growth accelerated more-than-expected to 2.4 percent from 2.2 percent in September. Economists had forecast an annual increase of 2.3 percent.

"Against a backdrop of subdued consumer confidence and signs of weakening in the labour market, this performance indicates resilience, especially since mortgage rates are more than double the level they were before Covid struck and house prices are close to all time highs," Nationwide's Chief Economist Robert Gardner said.

Gardner expects housing affordability to improve modestly if income growth continues to outpace house price growth.

Moreover, borrowing costs are likely to moderate a little further if Bank Rate is lowered again by the Bank of England in the coming quarters, he noted.

"This should support buyer demand, especially since household balance sheets are strong - indeed, in aggregate the ratio of household debt to disposable income is at its lowest for two decades," Gardner added.