UK House Prices Drop At Slowest Pace In 9 Months
November 30 2023 - 11:57PM
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UK house prices declined at the slowest pace in nine months in
November as expectations of interest rate cuts in future eased
affordability pressures, the mortgage lender Nationwide Building
Society said Friday.
House prices registered an annual decline of 2.0 percent after
easing 3.3 percent in October. Prices marked the slowest fall since
February 2023. They were forecast to drop 2.3 percent.
On a monthly basis, house prices rose 0.2 percent in November,
slower than the 0.9 percent rise in October and confounded
economists' forecast of 0.4 percent drop.
Nationwide Chief Economist Robert Gardner said there has been a
significant shift in market expectations for the future path of
interest rates, if sustained, this could provide much needed
support for housing market activity.
These shifts in expectations have led to a decline in
longer-term interest rates that underpin fixed rate mortgage
pricing, the economist said.
"While mortgage rates are unlikely to return to the lows
prevailing in the aftermath of the pandemic, modestly lower
borrowing costs, together with solid rates of income growth and
weak/negative house price growth, should help underpin a modest
rise in activity in the quarters ahead," Gardner added.
Nonetheless, Gardner said a rapid rebound still appears
unlikely. Cost-of-living pressures are easing and inflation is
staying below the rate of average wage growth.
However, consumer confidence remains weak, and surveyors
continue to report subdued levels of new buyer enquiries.
Moreover, there are still upward risks to interest rates though
markets are projecting that the next Bank Rate move will be
down.
The Bank of England had kept its key interest rate unchanged at
5.25 percent at November and September meetings, snapping a streak
of 14 consecutive rate hikes.
The rate was lifted by a cumulative 515 basis points since
December 2021.
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