House price growth slows but remains in double digits – experts warn of “headwinds ahead”

Annual house price growth fell to 10% after reaching 11% in August. Nationwide’s latest Home Price Index asserted that homes are getting less and less affordable. House prices have risen faster than profits over the past few months, making it very difficult for many first-time buyers to get a deposit.

“Recent pricing models suggest that an element of rebalancing is occurring where most of the regions that have experienced the strongest price growth are those where affordability is still near or below the long-term average.”

George Franks, co-founder of London-based estate agents, Radstock Property, also said affordability is a “key issue” for many buyers.

He said: “Affordability is undoubtedly a key issue for many buyers given the price growth over the past year, but overall the real estate market continues to adjust to the growing economy. large.

“Defying logic is what the real estate market does best. The real estate market continues to be supported by a phenomenal shortage of stock and until that ends it’s hard to see prices go down.

Wales and Northern Ireland were the best performing regions this quarter, while London was the weakest.

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House prices rose 15.3% year-on-year in Wales, the highest growth rate since 2004.

Price growth remained high in Northern Ireland (14.3%) while growth in Scotland also increased to 11.3% – from 7.1% in the previous quarter.

However, the annual growth in house prices in England has slowed compared to the previous quarter.

Growth in house prices slowed from 9.9% to 8.5%.

However, price growth in the north of England continued to outpace that of the south of England.

Mr Gardner continued: ‘Yorkshire & Humberside was the best performing English region for the second quarter in a row, with prices up 12.3% year-on-year, followed by the North West, which was up 11.4%.

“London was the weakest, with annual growth slowing to 4.2% from 7.3% last quarter.

“The surrounding outer metropolitan area, which includes places such as Luton, Watford, Sevenoaks and Woking, also experienced a slowdown to 6.8%, from 8.2% in the second quarter.”

The Nationwide expert said the outlook “remains uncertain” for the remainder of the year, with activity very likely to slow as the stamp duty holiday ends today.

Government support is also expected to end tomorrow, which could lead to rising unemployment rates and slowing demand for housing.

Mr. Gardner added: “But it’s far from certain.

“The labor market has remained remarkably resilient to this day and, although it is weakening, it is possible that housing preferences will change in the wake of the pandemic – such as wanting more space or relocating – to continue to support the activity for a while. Again.”

Mark Robinson, managing director of Southampton-based Albion Forest Mortgages, said the lower price growth would help people move up the property ladder.

He said: “Demand was exceptionally strong in September, with even fewer properties available than in previous months, but few can deny that there are headwinds ahead.

“Rising unemployment after holidays and affordability issues will reduce people’s ability to get mortgages, and therefore demand for properties.

“That said, prices are more likely to stabilize than to fall given the lack of supply and first-time buyers who are still very active.

“Lower price growth will certainly help those looking to take that first step on the ladder, as it will ease the pressures on affordability.

“Overall, the real estate market will continue to be quite resilient for the remainder of the year, mainly due to the lack of homes for sale.”

Nicky Stevenson, chief executive of national real estate group Fine & Country, said the real estate market was still “hot white” and the end of the stamp duty holiday should be “on the muffler”.

She continued, “While exuberant spending may subside if the economic outlook becomes more uncertain, the housing market, with its dual function of necessity and investment for most households, shows no signs of vulnerability.

“The underlying factors suggest that annual house price growth will remain strong next year.

“The desire for more space with more amenities has become a necessity for many families and first-time buyers are more eager than ever to step up the ladder.

“Record interest rates, an imbalance between supply and demand and government incentives should ensure that the market remains buoyant.”

Nick Barnes, Head of Research at Chestertons, said: “Despite the dust that slowly settled during the stamp duty holidays, the September property market showed few signs of slowing down from August. .

“At our 31 offices in London, visits in September increased by 29% and portal inquiries increased by 33% compared to last month, with buyers returning from their summer vacation and resuming their normal lives . The London market also saw a slight increase in seller activity with the number of properties available to buy up to two percent.

“We expect the market to remain buoyant over the next few months at least as buyers will be eager to finalize their move before Christmas. Buyer demand continues to be supported by a very favorable mortgage market with lenders eager to secure new business offering attractive mortgage interest rates.

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