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House price growth slowdown rumbles on for third month

House price growth has continued to cool in November marking the third consecutive month to see a slowdown in property price rises.

The Nationwide House Price Index showed that house prices rose by 0.3 per cent month-on-month in November compared to growth of 0.5 per cent in October. Annually the pace of growth slowed from nine per cent in October 8.5 per cent in November.

The average house price remained fairly static at around £189,000.

Robert Gardner, Nationwide’s chief economist, said: “Housing market activity levels have remained relatively weak in recent months. The number of mortgages approved for house purchase in September was almost 20 per cent below the level prevailing at the start of the year and 27 per cent below the long-term average.

“Similarly, housing market turnover rates are well below long-term averages. For example, the number of mortgage transactions is currently equal to around four per cent of the housing stock – well below the long-run average of six per cent.”

Bank of England statistics revealed that mortgage approvals in September at their lowest level since July 2013. September approvals were four per cent lower than August falling from 64,054 to 61,267.

The British Bankers’ Association reported a more dismal outlook for bank mortgage approvals in October. Its data for house purchase approvals revealed a 16 per cent drop compared to October 2013 bringing the number of new homeloans agreed to 42,830.

Housing market statistics released today by the Land Registry showed a similar picture for October. The rate of house price growth was 0.1 per cent while the average house price was £177,377. Annually the pace of growth was 7.7 per cent.

The number of property transactions has increased over the last year. From May 2013 to August 2013 there was an average of 71,463 sales per month. In the same month a year later, the figure was 80,596.

The Land Registry’s London data showed a monthly increase of 0.7 per cent and an 18.6 per cent annual change, considerably higher than other regions. The average price of property in the capital is £460,060.

Gardner added: “Forward looking indicators, such as new buyer enquiries point to further softness in the near-term. However, if the economy and the labour market remain in good shape and mortgage rates do not rise sharply, activity is likely to pick up in the quarters ahead.”


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