UK house price growth subdued in October, but annual rises continue

UK house price growth subdued in October, but annual rises continue [Photo: iStock/illcha]

The rate at which property prices are rising across the UK saw a slowing down in October this year, according to new data, but prices still remain well ahead of the same time last year, showing good annual performance for the property market as a whole nationwide. 

According to data released this week by Nationwide, price growth in October was relatively flat, with the average property price now sitting at a little over £205,000 across the country. But while this meant that annual rises were below the 5.3 per cent that was recorded in September, prices are still up by 4.6 per cent when compared to October 2015, which proves the market is still heading in the right direction. 

When considering the fact that in 2016 the market has faced challenges such as the introduction of a three per cent Stamp Duty levy for those buying second homes and the Brexit vote, this latest annual data shows its strength even in the face of adversity, as opposed to any sort of weakness. 

On a monthly basis, Nationwide said that house prices in October were flat when compared to September. This was the first time there had not been growth on an annual basis for over a year, following on from 15 consecutive months of rises. 

Robert Gardner, chief economist at Nationwide, said that there had been something of a fall in activity over the last year, which had led to this flat growth in October, even though prices are up compared to 12 months ago. 

"Measures of housing market activity remain fairly subdued, with the number of residential property transactions around ten per cent below the levels recorded in the same period of 2015 in recent months," he said. 

"However, this weakness may still in part reflect the after effects of the introduction of stamp duty on second homes in April when buyers brought forward transactions to avoid additional stamp duty liabilities. Policy changes impacting the buy to let market may also be playing a role in dampening activity."

Mr Gardner went on to say, however, that growth in activity could be a reality in the not too distant future. 

"While the economic outlook is uncertain, solid labour market conditions and historically low borrowing costs should provide support to buyer confidence," he concluded.