Annual price growth at lowest rate since January 2024, says Nationwide

Annual house price growth fell to 0.5% in October, as geopolitical uncertainty continued to soften activity.

The figure is a drop from 0.8% in September and is the slowest pace of growth since January 2024.

The average price in October (not seasonally adjusted) was £272,566, with no monthly price change from September after taking account of seasonal factors.

Robert Gardner, Nationwide’s chief economist, attributed the market slowdown to “the uncertain economic backdrop”, pointing to geopolitical tensions and the resultant energy price inflation.

“This in turn has led to mounting financial market expectations of Bank Rate increases, which have maintained upward pressure on the market interest rates which underpin mortgage pricing,” he said.

Gardner said forward-looking indicators, such as new buyer enquiries and consumer sentiment, suggested “further softness” in the near term, but that there were “good reasons to believe the market will regain momentum” once the energy shock fades.

“The broader economy has proven surprisingly resilient to date, with annual economic growth accelerating in recent quarters,” said Gardner.

“Employment is holding up well, as are real incomes, while household balance sheets are solid, with debt levels still close to 20-year lows relative to household disposable income. 

“Moreover, the improvement in housing affordability seen over the past two years has been only partially unwound as a result of higher market interest rates, as income growth has continued to outpace house price growth by a wide margin.”