Modest acceleration in house price growth likely, says Nationwide

Housing market appreciation continued at 4.4 per cent in the year to late January, continuing an eight month run of price rises between 3.0 and 5.0 per cent according to the Nationwide.

The average price of a home in the UK stands at £196,829 - very slightly lower than the December figure of £196,999.

However “the risks are skewed towards a modest acceleration in house price growth, at least at the national level” warns Nationwide chief economist Robert Gardner. 

“The labour market appears to have significant forward momentum. Employment has continued to rise at a robust rate in recent months and, while the pace of earnings growth has slowed somewhat, in inflation-adjusted terms regular wages continue to rise at a healthy pace” he says.

Gardner joins the growing number of analysts who believe the market suggests it is now increasingly likely that interest rates will stay on hold for longer than previously anticipated - pushing up demand for homes in the months ahead.

“The concern remains that construction activity will lag behind strengthening demand, putting upward pressure on house prices and eventually reducing affordability. Indeed, the market is already characterised by a shortage of stock, with the Royal Institute of Chartered Surveyors reporting that the number of properties on estate agents’ books remains close to all-time lows” notes Gardner.