Nationwide has reported that the growth rate for house prices in the UK rose to 2.1% last month, which is the fastest rate since December 2022. The mortgage lender attributed the growth to increasing wages, which have boosted the confidence of some buyers. However, high mortgage rates and affordability issues have limited the number of prospective buyers in the marketplace.
Despite the growth in house prices to an average of £266,334 last month, prices are still below the historic highs achieved in the summer of 2022. However, this year’s weak annual growth figures have helped to boost this year’s figures to some extent.
Nationwide’s chief economist, Robert Gardner, has said that the rise in real wages is another significant factor contributing to the growth in house prices. While the rate of pay growth has slowed recently, it is still outpacing rising prices somewhat.
The Bank of England will be meeting on Thursday to decide on interest rates and the pace of pay growth will be one of the economic factors under consideration. It’s worth noting that Nationwide bases its figures on house prices on its own lending, so the statistics do not include cash buyers or buy-to-let deals
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