Annual house price growth halved in the UK last month, as economic uncertainty sparked by conflict in the Middle East continued to deter homebuyers. The average price of a British home rose 0.8% in the year to September to £274,251, according to Nationwide. That was half the rate recorded in August, when house prices grew 1.6% year on year.
It also marked the slowest pace of home price growth since December last year. House prices across the UK fell 0.2% month on month, after taking account of seasonal effects. The housing market has been subdued in recent months, with the US-Israel war with Iran and resulting disruption to Gulf oil flows having driven up energy costs and inflation fears.
That has fed through to higher interest rates on mortgages, making it more expensive for people to buy new homes. Both were sitting above 5.9%. Across the regions, East Anglia posted the biggest hit to house prices, logging an annual decline of 0.7%, according to Nationwide.
Northern Ireland was an exception, experiencing the strongest house price growth at an annual rate of 5.9%. However, the house price slowdown has improved affordability for some homebuyers, Gardener said. This suggests that activity should regain momentum in the quarters ahead, providing the energy shock fades and confidence returns – especially if market interest rates fall back to pre-conflict levels.”
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