That level of growth was a little lower than the preceding month’s rise of 14.3 per cent, but it was also the 11th time in 12 months that house prices had seen double-digit year-on-year growth.
The Nationwide commentary published with the data provided further evidence that property market conditions remained buoyant, despite growing concerns about the combination of rising inflation and a slowing economy.
Alongside the figures, Nationwide published the results of a survey it conducted of around 3,000 consumers across the UK. This showed that 38 per cent of respondents were either in the process of moving or considering a move. Private renters, at 45 per cent, were the most likely to be thinking about a move, and nearly half of all Londoners were contemplating it.
A growing appetite for larger loans
This combination of continuing strong house price growth and a heightened interest in moving home may lead an increasing number of landlords to consider larger loans. We will consider lending up to £1.5m on single properties up to 75 per cent LTV.
Such an option may interest some landlords in places like London, where property prices remain elevated and the market is continuing to undergo a period of post-pandemic adjustment.
But it is not just in London that investors may be interested in loans of this size. As prices continue to rise, a growing number of locations are likely to see single rental properties well in excess of seven-figure prices.
Meanwhile, higher-value loans can also widen the range of options for landlords wanting to invest in HMOs, on which we will offer advances of up to £1.5m.
Rental yields and capital growth
Clearly, rental values have to be substantial to support large loans, but market conditions may deliver that in London or in other good city locations, seaside towns and rural communities. HMOs that can house larger numbers of tenants may also fulfil the requirements.
Some landlords have found that high-value single rental properties can attract more reliable, longer-term tenants, delivering added value, perhaps in fewer void periods.
While such properties might produce lower rental yields, they may – depending on location and market conditions – deliver stronger capital growth. In some cases, landlords may be able to draw on this equity to expand their property portfolios further. That could enable landlords to grow and balance their portfolios with a mixture of expensive and more averagely-priced rental properties.