UK house price growth slows in November, Nationwide reveals

UK house price growth slowed in November as demand continued to outstrip supply, Nationwide revealed on Thursday.

Prices increased an annualised 4.4% last month following a 4.6% rise in October. Economists had expected a 4.7% gain.

On a month-on-month comparison prices, edged up 0.1% in November compared to flat growth the previous month.

Nationwide’s chief economist Robert Gardner said that while there are signs that demand has strengthened in recent months despite an uncertain economic outlook, a shortage of properties has supported prices.

Gardner said solid labour market conditions and historically low borrowing costs have supported demand amid concerns about the impact of an impending Brexit.

“Mortgage approvals increased in October, and surveyors report that new buyer enquiries have increased modestly,” he said.

“The relatively low number of homes on the market and modest rates of housing construction are likely to keep the demand/supply balance fairly tight in the quarters ahead, even if economic conditions weaken, as most forecasters expect.”

Howard Archer, chief UK and European economist at IHS Global Insight, expects house prices will come under increasing pressure in 2017 when the government invokes Article 50, the formal process of exiting the European Union. The economist sees bout a 2% decline in prices next year.

"We believe the fundamentals for house buyers will progressively deteriorate during 2017 with consumers’ purchasing power weakening markedly and the labour market likely softening," he said.

"Additionally, housing market activity is likely to be limited in 2017 by weaker consumer confidence and willingness to engage in major transactions."