LONDON: British house prices rose by a marginal 0.1% in October, slowing sharply from a 0.6% monthly increase in September but the market remained resilient and was likely to gain momentum as borrowing costs fall, mortgage lender Nationwide said on Friday.
Economists polled by Reuters had forecast prices would rise by 0.3% on a monthly basis.
Compared with October last year prices were 2.4% higher, a weaker annual increase than September’s 3.2% rise and below the median forecast for a 2.8% gain in the Reuters poll.
Robert Gardner, Nationwide’s chief economist, said the housing market remained resilient and activity was likely to strengthen as interest rates fall.
The Bank of England is expected to cut borrowing costs on Thursday next week followed by further reductions in 2025.
The expiry at the end of March next year of a temporary tax incentive for home-buyers – which was confirmed in finance minister Rachel Reeves’ first budget this week was also likely to increase demand in the first three months of 2025.
“However, the swings in activity are likely to be somewhat less pronounced, in this instance, given that the stamp duty reduction has been in place for some time and its planned expiry was well known,” Gardner said.
An increase in the higher rate of stamp duty for second homes could dampen demand for buy-to-let properties, he said.
Source Homevior.in
