Third sign in one week that housing market is strengthening

First came a Bank of England prediction that the market will strengthen in the autumn; then lenders reported a surge in mortgage borrowing; now the Nationwide reports an increase in house prices with more to come.

The building society says average house prices increased by 0.5 per cent in September, with the annual pace of growth picking up modestly to 3.8 per cent from 3.2 per cent in August.

A typical UK property now costs £195,585 says the Nationwide.
 
“The data in recent months provides some encouragement that the pace of house price increases may be stabilising close to the pace of earnings growth. However, the risk remains that construction activity will lag behind strengthening demand, putting upward pressure on house prices and eventually reducing affordability" explains Robert Gardner, Nationwide's chief economist.

“Indeed, in recent months surveyors have reported historically low levels of properties for sale and increased new buyer enquiries. Therefore it is unsurprising most surveyors expect a pickup in house price" he says.

Despite speculation of a slowdown, there is still price growth at or above the rate in the UK overall over the past year in Greater London - although some high end estate agents admit prime London prices are relatively stagnant. 

The Nationwide says the annual rate of price growth in London is currently the highest in the country and actually accelerated to 10.6 per cent in the third quarter of 2015, up from 7.3 per cent in the middle of the year.
 
“The gap between London house prices and the rest of the UK has continued to reach new highs. The price of a typical home in the capital - £443,399 - is more than double the UK aggregate, and more than three and a half times the price of the typical property in the cheapest UK region, the North of England.