Nationwide says average property price was £258,557 in November, £5,231 down on same month last year
UK house prices rose for a third consecutive month in November as the market responded to hopes that mortgage rate costs had peaked.
Nationwide, the UK’s biggest building society, said prices rose 0.2% month on month in November, after a 0.9% rise in October and a 0.1% rise in September. Economists polled by Reuters had forecast a 0.4% fall in prices in November.
It is the first time that homeowners have seen the value of their property rise at least three months in a row since the summer of last year.
On an annual basis, prices were down 2% in November, the best in nine months and after a 3.3% year-on-year fall in October.
The average price of a home was £258,557 in November, £5,231 down on the value of a typical property in the same month last year.
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Nationwide said the improvement in the market has followed the view that the Bank of England’s move to hold the base interest rate at 5.25%, after a run of 14 consecutive increases, means soaring mortgage costs will start to drop, fuelling more activity in the housing market.
“There has been a significant change in market expectations for the future path of the bank rate in recent months which, if sustained, could provide much-needed support for housing market activity,” said Robert Gardner, the chief economist at Nationwide. “By the end of November this had shifted to a view the rates have now peaked and that they will be lowered to about 3.5% in the years ahead.”
In November, the Bank of England kept the rate at 5.25% for a second time, albeit still at a 15-year high, which has helped to push some two- and five-year fixed mortgage rates back down to below 5% – down from peak levels of more than 6%.
Last month, the sharp drop in inflation from 6.7% to 4.6% fuelled hopes that the Bank of England might start cutting rates next year.
However, earlier this week Andrew Bailey, the governor of the Bank of England, said there was no immediate prospect of an interest rate cut as the Bank faces a tough battle to bring inflation back to its 2% target.
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Mark Harris, the chief executive of the mortgage broker SPF, said: “The direction of travel for new mortgage rates is downwards, with a number of lenders making reductions this past week and bringing some early Christmas cheer to borrowers.
“However, while interest rates appear to have peaked, those hoping base rate will move swiftly downwards again to the rock-bottom levels of the recent past are likely to be disappointed. Pricing is higher than borrowers have grown used to over the years, meaning those buyers relying on mortgages are more price-sensitive on the back of ongoing affordability concerns.”
By Mark Sweney
Source: The Guardian