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Nationwide upbeat on housing market

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Northern Ireland has bucked the nationwide trend of static or declining house prices says the latest Nationwide building society quarterly house price review, with house price inflation maintaining a rocket like 11.4 per cent over the summer months.

The rate of growth is more than four times the 2.7 per cent British average for the period July to September. Scotland and Wales also outperformed the UK average, with house price growth three and a half times the national average at 7.1 per cent and three per cent respectively.

The south east was the worst performing area through the summer, with house prices falling 0.2 per cent. The only areas of England to make it into the top five regions of growth were the north west, with 4.8 per cent house price growth, and Yorkshire and Humberside at 4.6 per cent. The average UK home now costs £156,517 compared to the £153,727 of one year ago.

Despite sluggish growth across most areas Nationwide remains upbeat about the market as a whole, pointing to an increase in buyer activity over the summer months. "The lack of forced sales has helped the market to remain steady, but so too has the relatively robust state of the macro economy, particularly the labour market," Fionnuala Earley, Nationwide’s group economist, told the Times.

"While unemployment has increased for seven consecutive months, employment levels still remain higher than at any time since comparable records began in 1971, and wage growth continues to be positive in real terms," she added

Nationwide's sunny outlook was bolstered by figures released by the Bank of England showing that mortgage lending approvals, a key indicator of housing market health, rose to their highest level for over a year. Approved mortgage applications rose by almost 10,000 between July and August, from 99,000 to 107,000. The total amount of mortgage lending in the UK also increased dramatically from £6.270 billion to £7.591 billion.

Low levels of inflation over the period had served as a buffer and had kept the cost of borrowing down said Ms Earley: "This may help to explain why we have seen a surprisingly swift return of buyers to the market. Estate agents have consistently reported increased buyer interest over the last few months, which should help to support the market going forward," she said.

Nationwide emphasised that house prices and activity remained reliant on an uncertain macro economic climate and that the "well behaved" housing market could take a knock from disappointing retail figures and oil price linked inflation.

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