The data comes from the latest Nationwide HPI

Mixed reactions to weak house price growth: 'people are sitting on their hands'

House prices in September have not changed since August but remain down by 5.3% year-on-year by around £14,500, according to the latest Nationwide HPI.

The average house price registered in September stood at £257,808, only marginally lower than August (£259,153).

While all regions recorded annual house price falls in Q3, the South West was the weakest performing, with prices down by 6.3% year-on-year.

Wales saw a sharp decline of 5.4%, compared to a drop of 1.4% in Q2, while Scotland’s fell by 4.2% from -1.5% last quarter.

Northern Ireland saw the smallest change with a 1.8% drop.

The price tag of detached homes rose by 23.8% and were the highest growing property type from Q1 2020 to Q3 2023, while flats witnessed the lowest performing growth of 11.6% in this period.

Robert Gardner, chief economist at Nationwide, commented on the data: “This relatively subdued picture is not surprising given the more challenging picture for housing affordability.”

Meanwhile, two weeks ago, the Bank of England (BoE) maintained its base rate of 5.25%.

Industry professionals had mixed responses to the latest house price data, from optimism to a more negative outlook on the situation.

Jeremy Leaf, estate agent and a former residential chairman at RICS, said: “Although the Nationwide HPI is an historically reliable indicator of market health, broader economic factors are just as compelling.

“Successive increases in base rate and lender nervousness have meant those with cash have been playing a more significant role now that buyers continue to hold sway.

“In our offices, we are not seeing talk of a market correction — rather, promising signs of falling mortgage rates, though modest so far, are encouraging viewings and helping to keep existing sales alive.”

However, others were not as optimistic — Riz Malik, director at R3 Mortgages, commented: “As much as it pains me to say this, the market is as good as done for 2023 and will limp into 2024.

“The Nationwide HPI suggests that the base rate won’t come down significantly and they may not be wrong, unless the economy really starts to deteriorate.

“People need to recalibrate to the new norm in rates; even if the Conservatives announce new stimulus measures at its conference this week, that will have little impact on completions or house prices this year as sentiment has been hit for six.

“There’s wasn’t much confidence among buyers, despite the fact that mortgage rates consistently edged down during September; amid all the uncertainty, people are sitting on their hands.”

Tomer Aboody, director at MT Finance, added: “As mortgage rates fluctuate on a daily basis, buyers and sellers are uncertain as to where the market is, which makes for instability and lower transaction volumes.

“With the BoE holding rates in September, confidence may start creeping back in, especially if there is another hold in rates at the next meeting.

“Mortgages are slightly cheaper, which will hopefully encourage buyers and sellers to act in the final quarter.


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