Nationwide says UK house prices up again
House prices recorded a second month of growth, across the UK, in November, according to the Nationwide Building Society.
At that earlier point it saud that the reason for the rise was that there were fewer and fewer houses coming onto the market and with that restricted supply it was keeping up pricing across the price curve. Despite a monthly gain, prices are down 2% down on an annual basis – but this is still outperforming the expectations of economists in a poll for the Reuters news agency which had forecast a 2.5% decline. This latest report comes just days after Bank of England data showed a leap in mortgage approvals in October.
(AI Video Transcript)
UK house prices
UK house prices have unexpectedly risen for the second month in a row, according to the Nationwide Building Society. In November, prices increased by 0.2%, following a 0.9% rise in October. This surprising growth can be attributed to a limited supply of homes entering the market, including both new builds and resales. Although prices are still 2% lower than last year, this is better than the anticipated drop of 2.3% that economists predicted. This news comes after the Bank of England reported a surge in mortgage approvals in October. Consequently, major housebuilding companies like Persimmon and Barrett Developments have seen significant increases in their share prices.
The FTSE 350 Household Goods and Home Construction Index
The positive impact on the housebuilding sector is evident in the FTSE 350 Household Goods and Home Construction Index, which includes Persimmon and Barrett Homes among other prominent builders. The index has reached levels not seen since May this year. Barclay, which will release its half-year figures next week, has also experienced substantial gains, reaching its highest price since January 2022. Redrow, another house builder, has also seen similar increases, although it is slightly below its recent peak. Taylor Wimpey, on the other hand, has reached levels not seen since May this year. Overall, the Nationwide Building Society's positive figures have had a beneficial impact on the housebuilding sector, leading to significant gains for various companies.
The Bank of England's data
This unexpected rise in UK house prices has defied economists' predictions, who had expected a decline. The limited supply of housing stock entering the market has contributed to the price growth. Furthermore, the Bank of England's data showing a surge in mortgage approvals during October suggests increased demand for housing. As a result, the housebuilding sector has received a boost, as seen in the significant gains in share prices for companies like Persimmon, Barrett Developments, and Barclay Homes. This positive trend has spread to other builders, including Redrow and Taylor Wimpey, which have reached levels not seen in several months. Although prices are still down compared to the previous year, the smaller decline compared to economists' predictions is seen as a positive outcome
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