UK house prices keep rising; markets await Fed tapering decision –

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UK house price have hit fresh record highs, despite the prospect of the Bank of England raising interest rates in response to rising inflation.

Lender Nationwide reports that the price of the average house rose by 0.7% in October, up from 0.2% in September, extending the surge in prices since the first Covid-19 lockdowns ended last year.

The annual growth rate remained elevated at 9.9% in October, slightly lower than 10% a month earlier.

It means the average property price has risen by more than £30k since the pandemic hit early in 2020.

That lifts the price of a typical UK home over the £250,000 mark for the first time on Nationwide’s index (although the broader Land Registry data showed the average UK house price was £264,000 in August).

Robert Gardner, Nationwide’s chief economist, said demand for homes remained strong, despite the stamp duty holiday finishing at the end of September.

Indeed, mortgage applications remained robust at 72,645 in September, more than 10% above the monthly average recorded in 2019. Combined with a lack of homes on the market, this helps to explain why price growth has remained robust.

Gardner warns, though that the outlook remains “extremely uncertain”, as the government withdraws some of the pandemic support such as the job retention scheme (which ended a month ago).

If the labour market remains resilient, conditions may stay fairly buoyant in the coming months – especially as the market continues to have momentum and there is scope for ongoing shifts in housing preferences as a result of the pandemic to continue to support activity.

“However, a number of factors suggest the pace of activity may slow. It is still unclear how the wider economy will respond to the withdrawal of government support measures.

Consumer confidence has weakened in recent months, partly as a result of a sharp increase in the cost of living.

The…