UK House Price Inflation At 5-year High – Nationwide

UK house prices rose for a fourth straight month and the annual rate of increase hit a five-year high in October, survey data from the Nationwide Building Society showed on Friday.

The seasonally adjusted house price inflation accelerated to 5.8 percent, the highest rate since January 2015, from 5.0 percent in September. Economists had expected 5.2 percent increase.

On a month-on-month basis, the house price index climbed a seasonally adjusted 0.8 percent after a 0.9 percent rise in the previous month. Economists had forecast a 0.4 percent gain.

The unadjusted average price of a UK home grew to GBP 227,826 from GBP 226,129 in the previous month.

Housing market activity has remained robust despite a loss of momentum in the economic recovery and a weakening in labor market conditions in recent months, Nationwide Chief Economist Robert Gardner said.

“The outlook remains highly uncertain and will depend heavily on how the pandemic and the measures to contain it evolve as well as the efficacy of policy measures implemented to limit the damage to the wider economy,” Gardner said.

“Behavioral shifts as a result of Covid-19 may provide support for housing market activity, while the stamp duty holiday will continue to provide a near term boost by bringing purchases forward.”

Nationwide expects activity to slow in the coming quarters, perhaps sharply, if the labor market weakens as widely expected, especially once the stamp duty holiday expires at the end of March.

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