LONDON (Reuters) – British house prices rose in November at the fastest annual pace since November 2022, mortgage lender Nationwide said on Monday, adding to signs of resilience in the property sector despite higher borrowing costs.
Annual prices rose by 3.7% in November, and by 1.2% on a monthly basis, Nationwide announced. Both the annual and monthly gains were higher than economists in a Reuters poll had predicted.
“Housing market activity has remained relatively resilient in recent months, with the number of mortgage approvals approaching pre-pandemic levels, despite the higher interest rate environment,” said Robert Gardner, Nationwide’s chief economist.
Other measures of the UK housing market also showed an acceleration. Data from the Bank of England last week showed that lenders approved the most mortgage loans for home purchases from August 2022.
The BoE last month cut borrowing costs for only the second time in four years and said future rate cuts were likely to be gradual.
Gardener expects the real estate market to continue strengthening in the coming months.
“Provided the economy continues its steady recovery, as we expect, the underlying pace of housing market activity is likely to continue to gradually strengthen as affordability constraints ease through a combination of moderately lower interest rates and earnings outpacing housing price growth,” he said.
Prime Minister Keir Starmer’s Labor government, which came to power in July, has promised to reform the planning system to allow more construction.
It also set mandatory targets to accelerate house building, although a shortage of homes is likely to continue to be a factor in price increases in the medium term.
(This story has been edited to remove the repeated word from the title)
