The pace of annual house price growth slowed to 5.3 per cent in September from 5.6 per cent in August according to the latest Nationwide house price index.
The building society says the relative stability in the rate of house price growth suggests that the softening in housing demand evident in recent months has been broadly matched on the supply side of the market. While new buyer enquiries have remained fairly subdued, the number of homes on the market has remained close to all-time lows, in part due to low rates of construction activity.
The average house in the UK now costs £206,015.
Regions in the south east of England continued to record the strongest gains but growth remained subdued in Scotland and Northern Ireland with small price declines recorded in Wales and the North of England.
The organisation claims that the number of new homes built in England has picked up, but is still not sufficient to keep up with the expected increase in the population.
“Housebuilders should have confidence there will be sufficient demand if more homes are built. The major housebuilders appear to have capacity to expand output, with most reporting land banks that could support five years’ worth of construction at current rates of building activity. However, there is a risk that the uncertain economic outlook may weigh on activity in the period ahead” according to the society’s chief economist, Robert Gardner.
However Jeremy Leaf, north London estate agent and a former RICS residential chairman, says the society’s figures are dated. “The market has certainly picked up since early September, although concerns about Brexit and its impact on the property sector have certainly had an effect on prices and the time taken to commit to a purchase” he says.