It brings the annual growth rate to 3.3 per cent and the average house price now stands at £157,107, up from £156,517 in September. The Nationwide attributes the boost to the Base Rate cut in August but said it was evidence of stabilisation rather than a turning point into a period of price acceleration.
Fionnuala Earley, Nationwide’s group economist, said: “Affordability and overall debt will still have to adjust to more comfortable levels before we can expect any widespread increase in demand and thus prices.”
She added: “The robust price increase in October is likely to reflect a response to the rate cut in August with borrowers who had already decided to buy a house postponing their action in anticipation of a widely predicted cut in rates. While there’s increased liquidity in the market now, we don’t expect this will lead to a continued acceleration – more that stronger activity will act as a supporting cushion.
“The macroeconomic environment, while looking more promising, is still uncertain and clearly subject to close scrutiny by the Monetary Policy Committee with inflation 25 per cent above its target. Whichever way it goes there is little scope for an acceleration in house price growth.”
l Nationwide has launched several fixed and tracker mortgage products, allowing borrowers to overpay or underpay. The fixed rates start at 4.59 per cent for two years; 4.79 per cent for three and five years; and 4.99 per cent for ten years. The tracker products are from 4.54 per cent for two years and 4.74 per cent for three years. Reservation fees are payable – £199 for five and ten-year fixes and £399 for the other fixed and tracker products.
