The Nationwide Building Society has reported that the pace of annual house price growth slowed to 5.3% in September, from 5.6% in August, though it remained within the narrow range of 3% to 6% that has prevailed since early 2015.
The report found that house prices increased by 0.3% in September, with the average price of a home now totalling £206,015.
Robert Gardner, Nationwide’s chief economist, said: “The relative stability in the rate of house price growth suggests that the softening in housing demand evident in recent months has been broadly matched on the supply side of the market. Survey data indicates that, while new buyer enquiries have remained fairly subdued, the number of homes on the market has remained close to all-time lows, in part due to low rates of construction activity.
“Regional price trends were also little changed. Regions in the south east of England continued to record the strongest gains even though price growth slowed noticeably in the Outer Metropolitan region (from 12.4% in Q2 to 9.6% in Q3) and in London (from 9.9% in Q2 to 7.1% in Q3).
“House price growth remained subdued in Scotland (+2%) and Northern Ireland (+2.4%) and small price declines were recorded in Wales (-0.5%) and the North of England (-0.2%), all relative to Q3 last year.
“The number of new homes built in England has picked up, but is still not sufficient to keep up with the expected increase in the population. In the four quarters to Q2 2016, 139,000 new houses were completed, 30% higher than the low point seen in 2010. However, this is still around 15% below the average rate of building in the five years before the financial crisis and 38% below the 225,000 new households projected to form each year over the coming decade.”
Ben Madden, managing director of London estate agents Thorgills, added: “The annual rate of house price growth may have nudged down but the slight uptick in September shows a resilience in the market that many did not expect post-Brexit.
“The acute supply shortage is the major pillar supporting house prices but the recent interest rate cut and the prospect of another cut to come also stimulated demand in September and complemented the usual seasonal uplift.
“Without a shadow of a doubt, prospective buyers are being far more cautious before they offer but likewise sellers are beginning to feel that they are in a stronger position than they were a few months ago.
“In terms of price growth, London may be out of the top three regions for the first time since 2009 but every cloud has a silver lining.
“The capital’s housing market had to cool down and so for the sake of longer term stability being off the podium for a while will do it no harm.”