The latest numbers from Nationwide show a 2.5% annual increase in price growth as the UK market remains steady in the face of uncertainty.
Prices also crept up month on month by 0.1%, although this is down from 0.2% in October as home owners’ transition into the quieter Christmas season and digest the changes from the government’s Autumn budget.
Nationwide is taken a particularly exciting turn this month by announcing its own development society that plans to build 200 new homes. The mortgage lender is planning to build on 5 acres of brownfield land and will put £50m into the project that will reinvest profits into the community.
The government’s Autumn budget was also announced this month, giving first-time buyers across the UK a break on the Stamp Duty tax on properties under £300,000 – a welcome increase from £125,000. Although this does not affect all areas of the UK, first-time buyers in London are seeing a decrease in their payments, averaging £9,778 down from £13,102.
However, property experts are questioning whether this is beneficial to the current housing crisis, and if it will likely help, with many believing a renewed demand at one end of the ladder, and a continued lack of housing supply, will actually see prices increase in the long run.
Although Nationwide’s announcement to build is a noble one, more needs to be done in order to fix the severe lack of affordable housing.
A muted but stable level of house price growth is probably the best we could hope for at this time of year, given the seasonal market slowdown coupled with already tougher than usual market conditions.
It’s very early days to be observing any kind of impact from the changes to first-time buyer stamp duty and while it may help stimulate demand, and in turn prices, this will only be noticeable much further down the line.
I certainly wouldn’t be holding my breath where the encouraging signs for housing supply are concerned. Should the Government continue to fail in delivering a meaningful number of new homes, which it no doubt will, the overwhelming levels of buyer demand to stock available will keep prices climbing throughout next year, despite the additional help from Nationwide.Russell Quirk