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Nationwide House Price Index February 2018

Nationwide House Price Index February 2018

The report issued by the Nationwide this morning is based on lending for house purchases at post survey approvals stage, so provides us with a reliable indication of the UK housing market in January from one of the country’s biggest mortgage lenders.

It would seem that prices have held strong as we’ve started 2018 with the annual rate of house price growth at 3.2% in January, versus 2.6% in December. This unexpected ‘growth spurt’ in the market is perhaps more surprising due the fact that mortgage approvals dropped in December, albeit that this was well within seasonal expectations in terms of market activity and therefore, as such, no cause for concern.

However, what this morning’s report does perhaps highlight is that, in many areas, whilst there were fewer buyers active in December, there were even fewer properties available, and it’s this paucity of stock which means that if a realistically priced property is hitting the market, in most areas, it’s selling at a premium, even against a backdrop of jitters in terms of consumer spending and stalling wage growth. But the macro picture of continuing low interest rates, competitively priced mortgage products and low levels of unemployment, coupled with the rising cost of renting in many towns and cities, means that homeownership is still seen by many as a sound long term investment. From a borrowing perspective, lenders are very much open for business and reviewing their rates accordingly, which provides further support for the market as we move into the Spring.

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