Data published by Nationwide Building Society showed that housing prices rose by 1.2% in November, accelerating compared to October (+0.1%), and recording the sharpest increase since March 2022. Economists expected prices to increase by 0.2%. This was the third increase in a row.
In annual terms, house prices rose by 3.7% (the strongest pace since November 2022) after an increase by 2.4% in October. This was the 10th increase in a row. Economists had forecast growth of 2.4%. As a result, the average price of a typical home (not seasonally adjusted) was 268,144 pounds compared to 265,738 pounds in October. Nationwide said that house prices are now just 1% below the all-time highs recorded in the summer of 2022, after taking account of seasonal effects.
“The acceleration in house price growth is surprising, since affordability remains stretched by historic standards, with house prices still high relative to average incomes and interest rates well above pre-Covid levels. The pickup in price growth is unlikely to have been driven by upcoming stamp duty changes, since the majority of mortgage applications commenced before the Budget announcement. Overall, solid labor market conditions, with low levels of unemployment and strong income gains, even after taking account of inflation, have helped underpin a steady rise in activity and house prices since the start of the year. Gauging the underlying strength of the market will be more difficult in the coming months as the upcoming stamp duty changes will provide an incentive for buyers to bring forward house purchases to avoid paying additional tax," said Robert Gardner, Nationwide's Chief Economist.