Property prices in the UK saw their fastest annual growth rate since March 2017 according to Nationwide, a surprise positive turn for many experts who’d set out more sober expectations.
House prices across the UK have now reached an average £211,756 since the last index was released. It was the same monthly increase of 0.6% as that seen in December, although the year-on-year growth rate rose to a 10-month high of 3.2%.
January’s results have surprised some who had predicted a slowing market due to the squeeze on household incomes and a lack of real wage growth.
Robert Gardner, Nationwide’s chief economist, said: “The acceleration in annual house price growth is a little surprising, given signs of softening in the household sector in recent months. Retail sales were relatively soft over the Christmas period, as were key measures of consumer confidence, as the squeeze on household incomes continued to take its toll.”
In short supply
However, most are putting the house price increase down to a lack of available properties for sale nudging prices up, as well as factors including the availability of cheap mortgage products in the face of last year’s Bank of England base rate rise.
Brian Murphy, head of lending for Mortgage Advice Bureau, said of Nationwide’s results: “What this morning’s report does perhaps highlight is that, in many areas, whilst there were fewer buyers active in December, there were even fewer properties available, and it’s this paucity of stock which means that if a realistically priced property is hitting the market, in most areas, it’s selling at a premium, even against a backdrop of jitters in terms of consumer spending and stalling wage growth.
“But the macro picture of continuing low interest rates, competitively priced mortgage products and low levels of unemployment, coupled with the rising cost of renting in many towns and cities, means that homeownership is still seen by many as a sound long-term investment.”
Halifax has also released it’s house price index for January, which offers a more reserved view of the market.