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Nationwide: house price growth slows again in January

Nationwide: house price growth slows again in January

Latest index shows pace of house price growth is still slowing across the UK.

Reena Sewraz

Mortgages and Home

Reena Sewraz
Updated on 29 January 2015

House price growth has slowed for the fifth consecutive month, according to the latest figures from Nationwide.

UK house prices rose by just 0.3% between December and January, pushing the annual rate of increase down from 7.2% to 6.8%.

Nationwide says the average price of a home in the UK has dropped from £188,559 to £188,446.

House price growth

Here’s how prices have changed over the past 12 months, according to the Nationwide House Price Index.

 

Monthly change % (seasonally adjusted)

Annual % change

Average house price

January 2014

0.8%

8.8%

£176,491

February 2014

0.8%

9.4%

£177,846

March 2014

0.5%

9.5%

£180,264

April 2014

1.2%

10.9%

£183,577

May 2014

0.7%

11.1%

£186,512

June 2014

1.0%

11.8%

£188,903

July 2014

0.2%

10.6%

£188,949

August 2014

0.8%

11.0%

£189,306

September 2014

-0.1%

9.4%

£188,374

October 2014

0.6%

9.0%

£189,333

November 2014

0.3%

8.5%

£189,388

December 2014

0.2%

7.2%

£188,559

January 2015

0.3%

6.8%

£188,446

Source: Nationwide

Why is this happening?

Nationwide says further moderation is unsurprising given the slowdown in housing market activity in recent months.

The building society reports the number of mortgages approved for house purchase is around 20% below the level seen at the start of 2014 and there has been a lack of new buyer enquiries.

However, even though house price growth continues to outpace income growth, affordability does not appear to be stretched at a national level, the building society says.

The cost of paying off a typical mortgage remain close to the long term average thanks to record low mortgage rates.

Robert Gardner, Nationwide’s Chief Economist, says a lack of new homes is keeping prices up despite demand dipping.

The number of new homes built in England was up 8% in the year to Q3 2014, but this is still 34% below pre-crisis levels and only half what is expected in the years ahead.

Gardner says: "If the economic backdrop continues to improve as we and most forecasters expect, activity in the housing market is likely to regain momentum in the months ahead."

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