House price growth slows in September

House price growth softened in September according to the latest Nationwide House Price Index.

House prices increased by 0.3% in comparison to August’s figures and up 5.3% on the same period last year.

The average cost of a home now stands at £206,015.

The building society said that figures still “remained within the narrow range of 3% to 6% that has prevailed since early 2015.”

There was little change in regional price trends. The south east of England continued to see stronger increases in comparison to the outer Metropolitan region.

House price growth in Scotland and Northern Ireland remained subdued, with small decreases noted in Wales and the North of England.

The number of homes on the market remains close to record low levels with the number of new buyer enquiries also remaining flat.

The lack of new housing being built was cited as a contributing factor to this but encouragingly the number of new homes being built increased slightly.

Robert Gardner, Nationwide’s Chief Economist, said: “The number of new homes built in England has picked up, but is still not sufficient to keep up with the expected increase in the population. In the four quarters to Q2 2016, 139,000 new houses were completed, 30% higher than the low point seen in 2010.

“However, this is still around 15% below the average rate of building in the five years before the financial crisis and 38% below the 225,000 new households projected to form each year over the coming decade.”

Mr Gardner said that advantageous interest rates and such schemes as Help to Buy should reassure house builders that there is sufficient demand to buy the properties.

He suggested economic uncertainty maybe preventing some house builders from increasing their output despite having the capacity to do so at the current rate for the next five years.

The survey seems to suggest that more houses are being built in areas where “affordability is more stretched” and demand higher. More affordable regions have seen the least amount of new houses being built.

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