House prices unexpectedly rise again in November - Nationwide

(Sharecast News) - UK house prices unexpectedly rose again last month, according to a survey released on Friday by Nationwide. House prices were up 0.2% on the month following a 0.9% increase in October. This was the third monthly rise in a row and ahead of expectations for a 0.4% decline.

On the year, house prices were 2.2% lower in November following a 3.3% drop the month before. Analysts were expecting a 2.5% decline. Nationwide pointed out that while this was still weak, it was the strongest outturn since February.

The average price of a home now stands at £258,557.

Nationwide chief economist Robert Gardner said: "There has been a significant change in market expectations for the future path of Bank Rate in recent months which, if sustained, could provide much needed support for housing market activity."

He noted that in mid-August, investors were expecting the Bank of England to raise rates to a peak of around 6% and lower them only modestly, to around 4% over the next five years.

However, by the end of November, this had shifted to a view that rates have now peaked at 5.25% and will be lowered to around 3.5% in the years ahead.

"These shifts are important as they have led to a decline in the longer-term interest rates (swap rates) that underpin fixed rate mortgage pricing," he said. "If sustained, this will help to ease the affordability pressures that have been stifling housing market activity in recent quarters, where the number of mortgage approvals for house purchases has been running at c.30% below pre-pandemic levels."