- Jonathan Samuels, chief executive of Dragonfly Property Finance
House price growth in the UK slowed for a second consecutive month in October, adding to further signs that the country's property market is cooling. According to Britain's second biggest mortgage lender Nationwide, house price inflation fell to 9.0% on an annual basis, compared with 9.4% in September. On a monthly basis, house prices rose 0.5% in October following the 0.1% decline a month earlier, and bringing the average house price to 189,333 pounds. A number of indicators suggest the trend will continue to persist, with the activity softening further in the near term. The Nationwide said stricter mortgage lending rules, which took effect in April, might be one driver for the slowdown; while a fear of higher mortgage rates next year another. The recent data of the Bank of England showed that the number of mortgage approvals declined to the lowest level in 14 years in September.
While currently the Bank of England officials weigh when to start raising interest rates, as the nation's economy continues to strengthen, Nationwide's chief economist Robert Gerdner believes that the housing market "should be able to cope with higher interest rates, provided the increase is gradual and the economy and the labour market remain in good shape."
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