LONDON: UK house prices increased at a faster pace in October, data from Nationwide Building Society showed Wednesday. House prices increased 2.5% year-on-year, following September’s revised 2.3% rise. On a monthly basis, house price inflation halved to 0.2% from 0.4% in September. Nonetheless, this was the second consecutive rise in prices.
Annual house price growth remains within the 2-4% range that has prevailing since March, Robert Gardner, Nationwide’s chief economist, said. Low mortgage rates and healthy rates of employment growth are providing some support for demand, but this is being partly offset by pressure on household incomes, which appears to be weighing on confidence, the economist noted. The lack of homes on the market is providing support to house prices. Gardner said the proportion of borrowers directly impacted by a rate hike will be smaller than in the past, because the majority of mortgages were extended on fixed interest rates. Moreover, he said a quarter point increase in rates is likely to have a modest impact on most borrowers who are on variable rates.
