First time buyers across the country were praying for a miracle and, lo, it has come to pass. House prices have finally fallen, according to the latest Nationwide House Price Index.
Property prices dropped 0.2% in September, the first decline for 16 months, with the average UK home now costing £188,374. They still jumped 9.4% year-on-year, but that has slowed significantly from the 11% annual growth last month.
London is, unsurprisingly still way ahead of the pack, with prices up 21% year-on-year in the third quarter of this year. In contrast, prices in the north of England rose just 4.3% in the same period.The average pad in the capital now costs more than £400,000, but price rises could well be easing off. London’s quarterly price growth of 0.9% in the third quarter was the lowest in the UK (prices actually fell in Wales and the North).
It’s the first survey that shows house prices have actually fallen, but the data is still pretty mixed. Hometrack figures out last week found prices had stagnated across the UK and fallen in London in September. But Land Registry data from August found price growth increased.
As MT pointed out then, these various surveys and reports use different methodology. Nationwide bases theirs on the mortgages it approves, for example, rather than another metric like asking prices. So it’ll be a while yet before there’s conclusive evidence the property market is cooling off.
Plenty for Bank of England governor Mark Carney to mull over, then, as he and the Monetary Policy Committee decide whether to put interest rates up sooner rather than later.