House price growth appears to have stabilised at 2.5 per cent per year according to the latest index to appear, that from Nationwide.
It shows a tiny 0.1 per cent rise in prices during November, which doesn’t change the annual rate from the 2.5 per cent recorded a month ago.
This takes the average price of a home in the UK to £211,085.
“Annual growth remains within the 2-4% range that has prevailed since March. Low mortgage rates and healthy rates of employment growth are providing support for demand, but this is being partly offset by pressure on household incomes, which appears to be weighing on confidence. The lack of homes on the market is providing support to house prices” explains Robert Gardner, Nationwide’s chief economist.
“The decision in the Budget to abolish stamp duty for first time buyers purchasing a property up to £300,000 – with relief for those purchasing a property up to £500,000 – is likely to have only a modest impact on overall demand. In many regions, first time buyers already paid little or no stamp duty as the price of the typical first time buyer property was below the previous threshold of £125,000” he adds.
Gardner says the potential savings are more substantial for borrowers where house prices are higher, especially in London and the South East.
“However, as the Office for Budget Responsibility noted, some of the benefit is likely to be passed on to existing home owners through higher house prices, though overall impact on prices is likely to be very modest (the OBR estimate they may be increased by about 0.3 per cent, mostly in 2018).”