But it’s not all that dramatic, so don’t panic
For the third month in a row, UK house price growth has slowed.
House prices across the country grew 8.5% in the year to November.
That compares with 9% in the year to October, according to data collected by Nationwide.
UK house prices still rose by 0.3% in November alone, but the gradual slowdown is worth paying attention to.
And bear in mind we keep seeing evidence that London’s housing market is cooling down more significantly than the UK as a whole…
The latest on the London housing market slowdown…
>> London house prices are dropping… but demand is mega
>> Big price drop: London homes lose £30,000 in a month
>> London house prices see worst drop in four years – despair, rejoice, hold tight?
Robert Gardner, chief economist at Nationwide, commented: “Housing market activity levels have remained relatively weak in recent months.
“The number of mortgages approved for house purchase in September was almost 20% below the level prevailing at the start of the year and 27% below the long-term average.
“Similarly, housing market turnover rates are well below long-term averages.”
The curious case of the property price slowdown
It’s not altogether expected that the UK property market would be slowing down at this particular period in time.
After all, our economy is growing healthily, and two million more people have jobs than when the coalition government came to power.
“There is something of a disconnect between the slowdown in the housing market in recent months and broader economic indicators, which have remained relatively upbeat,” said Gardener.
“While cooling in the London market is a part of the story, this is unlikely to be [the] main explanation for the slowdown.”
But things should pick up again…
As economic indicators are looking quite positive, though, we shouldn’t get too concerned about UK property plummeting quite just yet.
Nationwide expects residential prices to bounce back again in the months ahead – and let’s remember the market is hardly tanking now, it’s just that growth has slowed slightly.
Gardner pointed out that employment is up and affordability “does not appear to be over-stretched”, while “historically low mortgage rates have helped mitigate against the fact that house prices have been outstripping income growth”.
Because of the buoyancy of the economy, he’s forecasting that activity in the UK housing market “is likely to pick up in the quarters ahead”.
Which is good news for property owners, but not so welcome for those looking to make their first step onto the property ladder in 2015.
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