House prices inch up, but they still remain ‘weak’ and a ‘rapid rebound’ is unlikely

According to Nationwide Building Society house prices have slightly notched up for a third month in a row in November, but despite this the value of homes remains “weak.”

Compared to October house prices inched up by just 0.2% in November, Nationwide has revealed on Friday.

In November property values were 2% lower compared to last year and the average property cost last month was £258,557.

Robert Gardner, Nationwide’s chief economist warned that house prices remain “weak,” however it is the strongest “outturn in nine months.”

Gardner said, “There has been a significant change in market expectations for the future path of bank rate in recent months which, if sustained, could provide much needed support for housing market activity.”

In November the Bank of England (BoE) held interest rates at 5.25% which has left many to believe that borrowing costs may have reached its peak.

Garnder added, “If sustained, this will help to ease the affordability pressures that have been stifling housing market activity in recent quarters, where the number of mortgage approvals for house purchases has been running at around 30% below pre-pandemic levels.”

Gardner warned, “Nevertheless, a rapid rebound still appears unlikely.”

He added, “Cost-of-living pressures are easing, with the rate of inflation now running below the rate of average wage growth, but consumer confidence remains weak, and surveyors continue to report subdued levels of new buyer enquiries.”

Andrew Bailey the governor of the BoE has warned the government it is “much too early” to be thinking about cutting rates.

Tom Bill, head of UK residential research at estate agency Knight Frank, said: “If we are not at the bottom of the current slowdown in the UK housing market, we must be close.

“Price indices are potentially more volatile due to low transaction numbers but sentiment has improved in recent weeks as the worst of the economic data moves behind us.”

Foxtons CEO, Guy Gittins, said,  “More property market positivity today, with house prices recording a second consecutive monthly increase.

Although the market is yet to return to full health when viewing house price performance on an annual basis, it appears as though a freeze in interest rates is helping to boost homebuyer sentiment and bring a greater degree of stability and this puts us in very good stead looking ahead to the new year”