Annual house price growth slowed to 8.5%, a fall from 9.0% in October.
Commenting on the figures, Robert Gardner, Nationwide's Chief Economist, said:
“The annual pace of house price growth continued to soften in November, falling from 9.0% in October to 8.5%, marking the third consecutive month where annual growth has moderated. This is despite house prices increasing by 0.3% month on month in November.
“Housing market activity levels have remained relatively weak in recent months. The number of mortgages approved for house purchase in September was almost 20% below the level prevailing at the start of the year and 27% below the long-term average. Similarly, housing market turnover rates are well below long-term averages. For example, the number of mortgage transactions is currently equal to around 4% of the housing stock1 - well below the long-run average of 6%.
“There is something of a disconnect between the slowdown in the housing market in recent months and broader economic indicators, which have remained relatively upbeat. While cooling in the London market is a part of the story, this is unlikely to be main explanation for the slowdown (indeed, in Q3, 10 of the 13 UK regions saw the pace of annual price growth slow and two regions saw quarterly price declines).
“In particular, the labour market has continued to improve, with employment rising strongly and the unemployment rate falling sharply in recent months (at 6% in the three months to September, the unemployment rate is well below the 7.6% prevailing over the same period last year). Moreover, indicators of consumer sentiment remain elevated, where healthy rates of retail sales growth and new car registrations also suggest that households are feeling more confident.
“Affordability does not appear overly stretched, at least at the UK level, with first time buyers continuing to represent an unusually high proportion of mortgage activity and with typical mortgage payments as a share of average income close to the long run average. Historically low mortgage rates have helped to mitigate against the fact that house prices have been outstripping income growth.
“Forward looking indicators, such as new buyer enquiries point to further softness in the near-term. However, if the economy and the labour market remain in good shape and mortgage rates do not rise sharply, activity is likely to pick up in the quarters ahead.”
Mark Harris, chief executive of mortgage broker SPF Private Clients, says:
"The annual pace of house-price growth continues to slow, demonstrating the softening in the housing market.
"Lenders with an eye on their year-end targets and pipeline for next year are determined to drum up business regardless and are targeting those remortgaging in particular with a flurry of rock-bottom deals launched this week by the likes of Barclays and Santander.
"Assuming interest rates don't rise for the foreseeable future, and Mark Carney himself has indicated that we are looking at the fourth quarter of next year at the earliest, low mortgage rates will continue to support the market. Once the uncertainty created by a general election is out of the way, it could be full steam ahead once more for the housing market as all that pent-up demand is released."
