SUMMARY

UK house prices rose by 0.5% in November according to Nationwide. This was the highest monthly rise of the year so far, and puts prices 0.8% above the same time last year. This is slightly above our recently updated forecast for 2019 of 0.5% growth. Our updated 5-year forecasts are in the table on page 3, with more detail in our forecasts report here: sav.li/fv6.

Alongside this modest value growth, we are also seeing hints in the latest data that the falls in activity levels are slowing. Figures from HMRC show that while transaction volumes continue to slide, October had seen the smallest annual fall since Aug-18, of only 0.6%. Land Registry figures showed the smallest fall of the year in September. It remains to be seen whether this will become a trend of recovering activity. Surveyors continue to report falling activity in the RICS Survey, but with instructions falling faster than enquiries there is no downward pressure on prices.

The longer term outlook for house prices has weakened however. Oxford Economics has downgraded its long-term GDP forecast from 1.7% to 1.4% per year between 2020 and 2030. This shift is based on the expectation of a looser relationship with the EU and lower levels of trade, along with an ageing and less productive population. This lower GDP forecast will restrict household income growth, which will in turn limit long term house price growth.