Annual house price growth slowed for the second month in a row in October, according to Nationwide building society, in the latest sign the market has lost momentum.
Although property values were up 0.5 per cent on September, hitting a new average high of £189,333, the year-on- year increase slipped from 9.4 per cent to 9.0 per cent. Annual house price growth was consistently in double digits over the summer.
Average UK property prices surpassed their 2007 peak in cash terms in May this year, and between then and August they hit a run of new records, before falling back slightly in September.
Robert Gardner, Nationwide’s chief economist, said: “A variety of indicators suggest that the market has lost momentum. The number of mortgages approved for house purchases in September was almost 20 per cent below the level at the start of the year.”
Mr Gardner added that with mortgage rates having fallen to rock-bottom levels, the typical repayment as a share of a householder’s take-home pay remains close to the long-term average, despite house prices being at an all-time high.
In a sign of what could be to come, the Bank of England reported yesterday that the number of mortgage approvals granted to homebuyers dropped to a 14-month low in September.
Some experts have said this is evidence of the housing market becoming steadier after the strong burst of activity seen earlier this year.
However, other commentators have predicted that with the wider economy still picking up, the weakening in mortgage approvals will not last for long.Reuse content