House prices are holding up despite the turmoil in financial markets, but a range of data released yesterday pointed to a more uncertain outlook. The Independent. The Guardian. Financial Times. The Times
Nationwide’s monthly index showed that house prices rose 0.7% between August and September, stronger than expected. However, the three-month growth rate slowed from 2% to 1.6%, its lowest since July 2006.
The British Bankers’ Association said mortgage approvals had fallen to 61,051 in August, 14.2% lower than in 2006 and the lowest August level since 2000.
The total value of mortgage approvals for house purchases also fell, from £10.07bn the previous August to £9.39bn.
Fionnuala Earley, Nationwide's chief economist, said: ‘Overall, house prices defied the gloomy predictions of some recent headlines, but their underlying growth is still on a decelerating trend.
‘Higher wholesale funding costs are now clearly leading to a reassessment of the pricing of credit in the mortgage market. As expected, this has not had an immediate impact on house prices, but the longer-term effect will undoubtedly be to take some of the froth out of the market.’