House price growth remained subdued in October, with many homebuyers and movers putting plans on hold amid ongoing Brexit uncertainty.
Annual price growth stayed below 1% for the 11th consecutive month in October, Nationwide Building Society said, with prices rising by just 0.4%.
“Indicators of UK economic activity have been fairly volatile in recent quarters, but the underlying pace of growth appears to have slowed as a result of weaker global growth and an intensifying of Brexit uncertainty,” said Robert Gardner, chief economist at Nationwide.
Halifax also recorded slow house price growth in October, with a modest rise of 0.9% over the past year. On a monthly basis, however, the bank said that house prices fell by 0.1%.
Rise in home sales
Despite slow house price growth, September saw a rise in UK home sales according to HMRC’s latest monthly data. There were 101,740 residential properties sold in September, up 5% compared to August and the highest level since August 2017.
Mortgage approvals have also risen slightly, with Bank of England figures showing that there were 65,919 mortgages approved to finance house purchases in September, 0.4% more than in August.
Russell Galley, managing director at Halifax said: “A number of underlying factors such as mortgage affordability and wage growth continue to support prices, however there is evidence of consumers erring on the side of caution.
“We remain unchanged from our view that activity levels and price growth will remain subdued while the UK navigates political and economic uncertainty.”
Borrowers lock into fixed rate deals
Homebuyers who have taken the plunge and bought in recent months have chosen fixed rate deals to provide them with protection against potentially higher rates in future.
More than 95% of borrowers have opted for fixed rate mortgages, Nationwide said, and around half of these have chosen to fix for five years.
End of year targets mean that mortgage rates are particularly competitive at the moment, with several lenders cutting rates to attract customers. Recent weeks have seen the launch of five-year fixed rate deals at rates less than 1.5%, as the margin between two and five-year deals continues to narrow.
House price growth slows as Brexit turmoil continues