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House prices remained more or less unchanged in September, the Nationwide was reported.
But because of what has gone before, the annual rate of house price growth remained in double digits for the fifth month in a row. T 10 per cent, it was one percentage point down in August.
The net result is that house prices are about 13 per cent higher than before the Coronavirus pandemic began in early 2020, Nationwide chief economist Robert Gardner pointed out.
Quarterly regional findings, ‘showed a mixed picture across the country in the three months to September, he said. ‘While price growth accelerated in Wales, Northern Ireland and Scotland, most English regions recorded a slowdown.
‘Wales was the strongest performing region with house prices up 15.3 per cent year-on-year – the highest rate of growth since 2004. Price growth remained elevated in Northern Ireland at 14.3 per cent. House price growth in Scotland picked up to 11.6 per cent, in contrast to the previous quarter when it was the weakest performing part of the UK at 7.1 per cent.
‘England saw a slowing in annual house price growth to 8.5 per cent, from 9.9 per cent in the second quarter’.
Price growth in northern England (North, North West, Yorkshire & Humberside, East Midlands and West Midlands) continued to exceed that in southern England (London, Outer Metropolitan, Outer South East, East Anglia and South West).
Yorkshire & Humberside was the strongest performing English region for the second quarter in a row, with prices up 12.3 per cent year-on-year, followed by the North West, which saw an 11.4 per cent rise.
London was the weakest performer, with annual growth slowing to 4.2 per cent from 7.3 per cent last quarter.
With house prices rising more quickly than earnings, affordability is becoming more stretched, said Gardner.
‘Recent price patterns suggest an element of rebalancing is occurring where most of the regions that have seen the strongest price growth are those in which affordability is still close to or below the long run average.
‘As we look towards the end of the year, the outlook remains uncertain. Activity is likely to soften for a period after the stamp duty holiday expires at the end of September, given the incentive for people to bring forward their purchases to avoid the additional tax. Moreover, underlying demand is likely to soften around the turn of the year if unemployment rises as government support winds down, as seems likely.
‘But this is far from assured. The labour market has remained remarkably resilient to date and, even if it does weaken, there is scope for shifts in housing preferences as a result of the pandemic – such as wanting more space or to relocate – to continue to support activity for some time yet’.