Nationwide sees continued property market cooling

Link: Nationwide sees continued property market cooling
Filed under: Property Market News

According to the Nationwide, annual house price growth is continuing to slow, with a price rise of only 1.8% during the 12 months to September - the lowest increase since May 1996, and a further decline on August’s 2.3% growth.

However, the quarter-point interest rate cut to 4.5% in August might now be boosting the market. Nationwide recorded a 0.2% decline in house prices during September, the same as in August. The average cost of a UK property now stands at £156,517.

House price growth in the three months to September was 2.7% higher than the same three months a year ago.

Nationwide said that estate agents had reported increased buyer interest over the last few months.

Fionnuala Earley, group economist at Nationwide said: “Rather than seeing a rapid and significant correction in house prices as predicted by some, we are more likely to see a continuing smooth slowdown as lower price inflation attracts more demand, and thus liquidity, into the market.”

Nationwide expects house prices at the end of 2005 to be at the same level as at the beginning of the year, or at most rising by 2%.

There was a slowdown in house price growth in all regions of the UK, but price rises in the north continue to be higher than in the south.

The highest house price inflation was 11.4% in Northern Ireland. In the south-east and London, prices either increased by less than 1% or actually fell.