Further evidence of cooling in the housing market emerged today as Nationwide reports the first monthly fall in house prices for 17 months.
The average UK property price fell 0.2 per cent to £188,374 in September, down from £189,306 a month earlier. As a result of the monthly dip, the annual rate of house price inflation dropped from 11 per cent in August to 9.4 per cent this month.
On a quarterly basis, Nationwide data shows all 13 regions in the UK saw price gains in the Q3 2014, with the national average up to £188,810 – a 1.5 per cent increase from the previous three months and 10.5 per cent annually.
The rate of annual price growth in London slowed from 25.8 per cent in the second quarter of the year to 21 per cent, with the average property in the capital now valued at £401,072.
The weakest annual price rise was recorded in the North, with prices up 4.3 per cent year-on-year to £121,990.
Nationwide chief economist Robert Gardner says: “While September saw a slowing in house price growth, the picture on a quarterly basis was still relatively strong. There remains significant regional variation however, with the South of England still seeing the strongest rates of growth.
“Price growth may soften further in the final quarter of the year, given the high base for comparison from Q4 2013. However, the outlook remains uncertain. There have been tentative signs from surveyors and estate agents that buyer demand may be starting to moderate, but the low level of interest rates and strong labour market suggest that underlying demand is likely to remain robust.”
Property search engine Placebuzz.com co-founder Andy Hatoum says: “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.
“The long-feared rise in interest rates is getting closer, and with more and better stock coming onto the market, many would-be buyers are deciding that now is the time to strike. With more choice available than we’ve seen in a long time, in many areas outside the capital prices are increasing at a sustainable rather than silly rate.”