UK House Price Inflation Slows More Than Expected

ukhouse nov01 30sep21 lt

UK house price inflation slowed more than expected in September, but remained in double-digits for a fifth month in a row, survey results from the Nationwide Building Society showed Thursday.

The house price index rose 10 percent year-on-year following an 11.0 percent increase in August. Economists had forecast a score of 10.7 percent.

The latest rate of inflation was the lowest since April, when it was 7.1 percent.

Compared to the previous month, house prices rose 0.1 percent in September after a 2.0 percent gain in August. Economists had forecast a 0.6 percent increase.

The average price for a UK home fell to GBP 248,742 from GBP 248,857 in the previous month.

In the September quarter, UK house prices rose 10.3 percent year-on-year, same as in the previous quarter. House prices rose 1.8 percent from the previous three months.

Among regions, Wales and Northern Ireland were the strongest performing regions in the third quarter, while the capital London was the weakest.

"As we look towards the end of the year, the outlook remains uncertain," Nationwide chief economist Robert Gardner said.

The building society expects activity to soften for a period after the stamp duty holiday expires at the end of September, given the incentive for people to bring forward their purchases to avoid the additional tax.

Underlying demand is also expected to soften around the turn of the year if unemployment rises as government support winds down, as seems likely, the economist said.

"But this is far from assured. The labour market has remained remarkably resilient to date and, even if it does weaken, there is scope for shifts in housing preferences as a result of the pandemic - such as wanting more space or to relocate - to continue to support activity for some time yet," Gardner added.

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