By UK house prices rose to levels higher than expected in November as the annual change in house price growth was recorded at 1.9 per cent, boosting the average UK house price to £214,044, according to recent data from the Nationwide House Price Index.
The monthly change in UK house price growth saw a modest increase of 0.3 per cent for month-on-month growth, which is the highest level of house price growth recorded since July this year. The annual house price growth also rose to 1.9 per cent from 1.6 per cent, recorded in October 2018, according to the Nationwide data.
The UK house price growth of 1.9 per cent annually and 0.3 per cent on a month-by-month basis has beaten economists’ predictions of 1.7 per cent annual growth, but not by much. Robert Gardner, chief economist commented: “While house price growth picked up a little in November, it remained relatively subdued at 1.9 per cent, up from 1.6 per cent the previous month.
“Looking forward, much will depend on how broader economic conditions evolve. In the near term, the squeeze on household budgets and the uncertain economic outlook is likely to continue to dampen demand, even though borrowing costs remain low and the unemployment rate is near 40-year lows.
“If the uncertainty lifts in the months ahead and employment continues to rise, there is scope for activity to pick-up through next year. The squeeze on household incomes is already moderating and policymakers have signalled that, if the economy performs as they expect, interest rates are only expected to rise at a modest pace and to a limited extent in the years ahead.”
The recent data from Nationwide comes in the same week as the Bank of England’s Money and Credit October report.
Mortgage market activity remained relatively stable for October as mortgage lending increased to £4.1 billion in October. The number of mortgage approvals for consumers buying a residential property was over 67,000, according to the recent Bank of England report.
The total amount that UK households borrowed against their homes in October 2018 was £4.1 billion, which is in line with the amount that was borrowed in September. But this but rose above the recorded levels earlier in the year according to the data.
The total number of mortgages that were approved for purchasing property in the UK has remained relatively stable over the past two years, which saw an increase to 67,000 in October. This is the highest number of approved mortgages for the purpose of purchasing a property recorded in the year-to-date. However; the number of remortgaging approvals remained unchanged in October at 49,000, according to the Bank of England.
Scottish property prices this St Andrew’s Day
In the same week that the Nationwide October House Price Index was published, Aberdein Considine released a report on the Aberdeen property market, which has shown signs of recovery. It now seems like the city is emerging from a long economic downturn in the oil and gas industry.
The number of property sales in Aberdeen rose by 7.9 per cent, which is the first time that property sales have raised in the past two years. Property prices in the area have stabilised as the average house price was recorded at £199,834, which was 0.5 per cent lower compared to October 2017, according to the Aberdein Considine report.
The value of property that was sold in Aberdeen increased 7.3 per cent year-on-year as the total sales reported in the area reached nearly £222 million, according to the recent report.
Jacqueline Law, managing partner at Aberdein Considine, commented: “The upturn in Aberdeen is great news after a prolonged difficult period and is hopefully an indicator that we are beginning to see the north east emerge from one of its most testing downturns.
“We can’t ignore the ongoing turbulence in relation to Brexit, as well as the corresponding uncertainty this is causing to both business and homeowners. That said, the return of a stable and prosperous oil and gas industry should hopefully provide some insulation against the challenges the country might face over the next few months and years.”
The average property price in Scotland in September 2018 was recorded at £152,961, which was an increase of 5.8 per cent when compared to September 2017. However, there was a month-on-month decrease in the average Scottish property price of 0.1 per cent when compared to August 2018, according to recent data from Registers of Scotland.
The UK as a whole saw the average house price increase by 3.5 per cent to £232,554 in September 2017 and there was no recorded change on a month-by-month basis according to Registers of Scotland.
There was an increase in the average property price across the majority of the 27 local authorities included in the recent report in September 2018. The local authorities that saw the largest average house price increase were West Dunbartonshire at £109,828 with an increase of 11.9 per cent and Glasgow City at £137,507 with an increase of 10.4 per cent, according to the report.
The local authorities that witnessed the largest decrease in average house prices were Aberdeen City at £161,439 with a 4.4 per cent decrease and Scottish Borders at £151,200 with a 2.7 per cent decrease.
Kenny Crawford, director of business development and information at Registers of Scotland, commented: “Average prices in Scotland continued their upward trend in September with an increase of 5.8 per cent when compared to September 2017. Average prices have been increasing each month since March 2016, when compared with the same month of the previous year.
“Residential sales volumes decreased in July. The annual decrease of 1.9 per cent when compared with July 2017 in Scotland is in the context of much larger decreases across the rest of the UK. The cumulative volume of sales for Scotland for the financial year to date – from April 2018 to July 2018 – was 34,763. This is a decrease of 4.8 per cent on the equivalent year
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