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UK house price growth saw a month-on-month decline in October, according to new figures from nationwide Building society.
experts suggest Budget Uncertainty and a cooling jobs market are weakening buyer confidence to a great extent.
The lender said the growth rate fell to 0.3 percent in October from 0.5 percent in September.
Annually, property values rose 2.4 per cent, a modest increase from September’s 2.2 per cent year-on-year rise, bringing the average UK house price to £272,226.
nationwideHowever, he described the market as “broadly stable.”
On the contrary, market analysts indicate that buyers are taking a “wait and see” approach ahead of the upcoming Budget.
This caution is driven by macroeconomic concerns and a weak labor market as well as speculation over potential property tax changes, which are identified as key factors hindering market activity.
Elliot Jordan-Doch, senior UK economist at Pantheon Macroeconomics, said house prices remain low but are likely to rise gradually in the coming months.
“We think some homebuyers are taking a wait-and-see approach on the budget, which is impacting the market sentiment a bit,” he said.
He added: “But activity indicators being better than their survey-based signals shows us that demand remains strong.
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“So, as all told, we expect activity to pick up once the Budget is passed and buyers get more certainty on policy.”
borrowing figures from Bank of England Earlier this week it emerged that home buying approvals hit a nine-month high in September as borrowing costs continued to fall.
Robert Gardner, nationwideChief Economist of India said: “The housing market have remained broadly stable in recent months, with home prices rising at a modest pace and the number of mortgages approved for home purchases remaining at the same level as prevailed before the pandemic arrived.
“Against a backdrop of low consumer confidence and signs of weakness in the labor market, this performance points to resilience, especially since mortgage rates are more than double the level previously seen covid hit and home prices are near all-time highs.”
He said the conditions would help support the property market in the coming months.
Mr Gardner said: “If income growth continues to exceed house price growth, as we expect, there is likely to be a modest improvement in housing affordability.
“The cost of borrowing is also likely to come down slightly further if the bank rate is lowered again in the coming quarters.”
The bank will announce its latest decision on interest rates next week and while most economists believe they will vote to remain at 4 percent, expectations for further cuts are rising in light of recent better-than-expected inflation data.
Sara at Coles Hargreaves Lansdowne Said: “It is likely that the market will hold its position even during the difficult winter months.
“Combined with the fact that wages are rising faster than home prices, mortgage rates that have been falling for more than six months will help persuade buyers to move, and the better deals that have emerged over the past week or so will also help support the market.”