The annual inflation rate has now declined for three consecutive months, from 3.9% in August and 6.6% in July. This is in line with Nationwide’s expectations for the year, which the lender predicted would deliver a fairly flat performance from property values.
Nationwide emphasised that the pace of decline is not “significant” at this stage, particularly compared to the house price falls witnessed during 2008.
The three month trend for property prices now stands at -0.9%, compared to -5.5% at its worst in 2008. However, it does describe the current housing market as offering a “slightly better hand to buyers than to sellers” at the moment, thanks to a recent increase in the number of properties coming to the market for sale.
When quizzed on Radio 4’s Today programme as to whether much of this increase was the result of forced selling, Nationwide chief economist, Martin Gabhauer said there was “little evidence” of this.
In the house price report he said: “Many of the new sellers who have marketed their properties may indeed be speculative sellers testing the market in response to the price gains seen since early 2009 and the abolition of Home Information Packs (HIPs).
“If this is the case, and there is little urgency to sell for financial or other reasons, then prices may remain more or less stable, albeit at the expense of market activity.”
Gabhauer added that the anticipated cuts in public spending would remain a “headwind” and a “challenge” in the years to come, but that the impact on the housing market would depend largely on the extent to which the private sector plug the gap.