Home price growth stagnates month-over-month in September

House price growth stagnated month-over-month in September, but property values ​​were still 9.5% higher than a year earlier, an index showed.

Estate agents have said there could be renegotiations amid rising interest rates – and if that turns into a trend, it could drive house prices down.

In the UK, the average house price in September was £272,259, the Nationwide Building Society said.

Real estate values ​​rose 0.0% month over month, following a monthly increase of 0.7% in August.

The annual price increase of 9.5% was slightly more modest than the 10.0% annual increase recorded in August.

Robert Gardner, Nationwide’s chief economist, said: “In September, annual house price growth slowed to single digits for the first time since October last year, although at 9.5% , the rate of increase remained robust.

“Prices remained unchanged over the month from August, after taking into account seasonal effects. This is the first month not to record a sequential rise since July 2021.

“There have been further signs of a market slowdown over the past month, with the number of mortgages approved for home purchases remaining below pre-pandemic levels and investigators reporting a drop in mortgage applications. new buyers.

“Nevertheless, the slowdown to date has been modest and, combined with a shortage of inventory in the market, this means that price growth has remained firm.”

Stamp duty cuts were made in last week’s mini-budget.

However, many mortgage products have been withdrawn in recent days due to economic uncertainties and lenders have priced their mortgages higher, leading to higher costs for borrowers.

Mr Gardner said: “By lowering transaction costs, the stamp duty reduction may provide some support for activity and prices, as may labor market strength, assuming it persists, with the unemployment rate at its lowest level since the early 1970s.

“However, headwinds are strengthening, suggesting that the market will slow further in the months ahead. High inflation is putting significant pressure on household budgets, with consumer confidence falling to historic lows.

“Housing affordability is increasingly strained. Deposit requirements remain a major hurdle, with a 10% deposit on a typical property for a first-time buyer equating to nearly 60% of annual gross income – an all-time high.

“Furthermore, the significant increase in prices in recent years, together with the significant increase in mortgage rates since the beginning of the year, have pushed the typical mortgage payment as a share of take-home pay well above the long term average.

Nationwide also released quarterly house price figures showing movements across the UK.

Mr Gardner said the South West of England remains the best performing region ‘even though annual house price growth has slowed to 12.5% ​​from 14.7% in the (second quarter) “.

He added: “Wales saw annual price growth slow to 12.1% but remained the best performing country.

“Price growth in Northern Ireland slowed to 10.1%. Meanwhile, Scotland saw a further slowdown in annual growth to 7.8%, from 9.5% last quarter.

Nathan Emerson, chief executive of estate agents and lettings body Propertymark, said: ‘Our own data from our estate agent members across the UK shows that the number of new homes and buyers arriving on the market is rising year by year, underlying stability.

“As interest rates rise, we could start to see renegotiations if mortgage deals expire during the disposal process, which currently takes over 17 weeks on average.

“A renegotiation trend would begin to soften house prices as these final sale prices are used by agents to create comparable evidence for the valuation of new properties entering the market.”

Mark Harris, managing director of mortgage brokerage SPF Private Clients, said: “So much has changed even since early September.

“Lenders have pulled fixed rate mortgages left, right and center as the volatility of swap rates makes them extremely difficult to value.

“A lot of smaller lenders in particular are waiting to see what the market does before they relaunch.”

He added: “Borrowers concerned about their mortgage should seek advice from a broker as to the options available and plan ahead as much as possible.”

Gabriella Dickens, senior UK economist at Pantheon Macroeconomics, said: “The latest data from Nationwide suggests that skyrocketing mortgage rates are finally starting to weigh on buyer demand.

“Raising the stamp duty property tax threshold to £250,000 from £125,000 will do little to offset the affordability problems caused by the upcoming spike in mortgage rates.”

Tomer Aboody, director of property lender MT Finance, said: “We will see a shift in sentiment and a shift to a buyers’ market, rather than sellers calling the shots.

“Prime properties, particularly in the London area, should hold values ​​as overseas buyers seek to take advantage of the weak pound.”

Andrew Montlake, managing director of mortgage broker Coreco, said: “The days of double-digit growth may not return for a long time.

“The level of uncertainty in markets and felt by consumers is out of this world. The brief surge in sentiment sparked by the stamp duty announcement on Friday has been wiped out by the tsunami of market volatility since.

“There is no doubt now that many potential buyers will either have to consider smaller homes due to the sharp increase in mortgage rates they are currently considering, or abandon their plans altogether and wait for there to be more clarity and things have calmed down. .

“Prices will no doubt come under real pressure now, but the steep declines that some have predicted are unrealistic given the lack of supply. Prices are much more likely to stall than cross the floor.

Ross Boyd, founder of mortgage comparison platform Dashly.com, said: “After last week’s chaos, the level of uncertainty in the real estate market is beyond scale.”

Here are the average home prices in the third quarter of this year, followed by the annual increase, according to Nationwide:

– South West, £321,725, 12.5%

– East Midlands, £241,699, 12.3%

– Wales, £213,684, 12.1%

– West Midlands, £247,120, 12.0%

– North West, £212,998, 11.3%

– East Anglia, £289,266, 11.2%

– Yorkshire and Humber, £209,261, 11.0%

– Outer South East (includes Ashford, Basingstoke and Deane, Bedford, Braintree, Brighton and Hove, Canterbury, Colchester, Dover, Hastings, Lewes, Fareham, Isle of Wight, Maldon, Milton Keynes, New Forest, Oxford, Portsmouth, Southampton, Swale, Tendring, Thanet, Uttlesford, Winchester, Worthing), £353,276, 10.4%

– Northern Ireland, £183,960, 10.1%

– Outer Metropolitan (includes St Albans, Stevenage, Watford, Luton, Maidstone, Reading, Rochford, Rushmoor, Sevenoaks, Slough, Southend-on-Sea, Elmbridge, Epsom and Ewell, Guildford, Mole Valley, Reigate & Banstead, Runnymede, Spelthorne , Waverley, Woking, Tunbridge Wells, Windsor and Maidenhead, Wokingham), £435,709, 8.3%

– North East, £159,309, 8.1%

– Scotland, £184,496, 7.8%

– London, £534,545, 6.7%

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