The Nationwide Building Society said UK house prices rose by 0.3% in November, with annual house price growth slowing to 8.5% from 9%.
It is the third consecutive month where annual growth has moderated, despite the month-on-month rise.
Robert Gardner, Nationwide’s chief economist, said: “Housing market activity levels have remained relatively weak in recent months. The number of mortgages approved for house purchase in September was almost 20% below the level prevailing at the start of the year and 27% below the long-term average.
“Similarly, housing market turnover rates are well below long-term averages. For example, the number of mortgage transactions is currently equal to around 4% of the housing stock1 – well below the long-run average of 6%.
“There is something of a disconnect between the slowdown in the housing market in recent months and broader economic indicators, which have remained relatively upbeat. While cooling in the London market is a part of the story, this is unlikely to be main explanation for the slowdown (indeed, in Q3, 10 of the 13 UK regions saw the pace of annual price growth slow and two regions saw quarterly price declines).
“In particular, the labour market has continued to improve, with employment rising strongly and the unemployment rate falling sharply in recent months (at 6% in the three months to September, the unemployment rate is well below the 7.6% prevailing over the same period last year). Moreover, indicators of consumer sentiment remain elevated, where healthy rates of retail sales growth and new car registrations also suggest that households are feeling more confident.”
Mark Harris, chief executive of SPF Private Clients, added: “Lenders with an eye on their year-end targets and pipeline for next year are determined to drum up business regardless and are targeting those remortgaging in particular with a flurry of rock-bottom deals launched this week by the likes of Barclays and Santander.
“Assuming interest rates don’t rise for the foreseeable future, and Mark Carney himself has indicated that we are looking at the fourth quarter of next year at the earliest, low mortgage rates will continue to support the market. Once the uncertainty created by a general election is out of the way, it could be full steam ahead once more for the housing market as all that pent-up demand is released.”
