LONDON: British annual house price growth slowed to its weakest since January 2024 in October, as the impact of rising market interest rates dampened appetite from buyers, monthly figures from mortgage lender Nationwide Building Society showed on Friday.
House prices in October were 0.5 percent higher than a year earlier, down from growth of 0.8 percent in September and economists’ 0.6 percent median forecast in a Reuters poll. Prices were unchanged from the previous month, after a downwardly revised 0.3 percent fall in September and economists’ forecasts for a 0.1 percent decline. “Geopolitical tensions remain high, with the conflict in the Middle East exerting upward pressure on energy prices, fanning inflation concerns,” Nationwide Chief Economist Robert Gardner said.
“This in turn has led to mounting financial market expectations of Bank Rate increases.” Other data points to further softness in house prices in the immediate future, Gardner added. Soon after the US-Iran conflict broke out at the end of February, financial markets ditched expectations of Bank of England rate cuts this year and began to price in rate increases, pushing higher the cost of mortgages that typically offer a fixed interest rate for two or five years.
While the BoE has kept rates on hold up to now, most economists now expect the BoE to raise rates for the first time in three years next week, increasing its Bank Rate to 4 percent from 3.75 percent. BoE data on Thursday showed that the number of mortgages approved for house purchase in September had fallen to its lowest since December 2023.
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