30th September 2014
After months of speculation that we may be in the midst of a housing market bubble, prices actually fell in September by 0.2% compared to the previous month.
This was the first fall following sixteen consecutive monthly rises, but the figures from Nationwide building society still showed an annual increase in prices of 9.4% from £172,127 to £188,374.
At the same time Nationwide also released its quarterly regional figures, which showed that London saw a 21% annual increase to £401,072.
Robert Gardner, chief economist at Nationwide, said: “While September saw a slowing in house price growth, the picture on a quarterly basis was still relatively strong, with all thirteen UK regions recording annual price gains.
“There remains significant regional variation however, with the South of England still seeing the strongest rates of growth.
Gardner added: “Annual house price growth in London slowed somewhat, from 25.8% in Q2 to 21% in Q3. Nevertheless, at £401,072, average prices in the capital reached a record high, 31% above their 2007 peak. In the UK as whole, prices are around 2% above their pre-crisis peak .”
Annual price growth in Wales slowed from 9.3% to 5.0%. Annual price growth in Scotland was similar to last quarter at 5.2%. Northern Ireland saw a 10.2% increase in prices, although they are still nearly 50% below their 2007 peak.
Gardner said that house price growth may tail off further this year as there are signs that agents are starting to see less demand from buyers.
Andy Hatoum, co-founder of the property search engine PlaceBuzz.com, said: “Such a modest month-on-month dip gives us few clues as to whether the runaway growth has exhausted itself or just taken a break.
“It doesn’t help that the Nationwide numbers fly in the face of the latest Land Registry data – which in August posted its fastest rate of growth in nearly seven years.
He added: “Certainly the pipeline of buyers is looking less healthy. Yesterday the Bank of England confirmed that mortgage approval levels have slumped to a three-month low as more would-be borrowers are being excluded by the tougher lending criteria introduced in April.
“While it’s far too early to call the top of the market, it’s clear that the exceptional rates of growth we’ve seen this year can’t continue. Demand is becoming more broad-based, and buyers more sensible in what they offer.”