House price growth picks up but increases remain ‘subdued’

House price growth picked up in November from a previous five-year low, although increases remain “relatively subdued”, according to an index.

Property values increased by 0.3% month on month, compared with 0% growth in October, Nationwide Building Society said.

The annual rate of house price growth also strengthened, to 1.9% in November, from 1.6% in October – which had been the weakest annual increase seen in more than five years.

Across the UK, the average UK house price is now £214,044.

Nationwide chief economist Robert Gardner said: “While house price growth picked up a little in November, it remained relatively subdued at 1.9%, up from 1.6% the previous month.

“Looking forward, much will depend on how broader economic conditions evolve.

“In the near term, the squeeze on household budgets and the uncertain economic outlook is likely to continue to dampen demand, even though borrowing costs remain low and the unemployment rate is near 40-year lows.”

#Nationwide reports #UK #house prices up modest 0.3% month-on-month in November, having been flat in October. Year-on-year increase edged up to 1.9% in November from 1.6% in October, which had been lowest annual increase since May 2013

— Howard Archer (@HowardArcherUK) November 30, 2018

Mr Gardner continued: “If the uncertainty lifts in the months ahead and employment continues to rise, there is scope for activity to pick up through next year.

“The squeeze on household incomes is already moderating and policymakers have signalled that, if the economy performs as they expect, interest rates are only expected to rise at a modest pace and to a limited extent in the years ahead.”

Howard Archer, chief economic adviser at EY Item Club, said: “We suspect that the housing market will remain stuck in low gear over the coming months – although there are varying performances across regions with the overall national picture dragged down by the poor performance in London and parts of the South East.

“Consequently, we expect overall house price gains across the UK over 2019 will be limited to around 2%.”