Why Latest House Price Data Makes Now The Time To Buy

The latest house price data from the Nationwide House Price Index may not have produced anything startling, but by reading between the lines and looking at underlying trends, many good reasons can be found for those looking to buy a property here in Hounslow to do so.

Prices actually fell 0.2 per cent month-on-month in August, which might suggest the market is experiencing a slight dip. It should be noted these figures reflect the fact that August is always a quiet month because so many people are on holiday and price drops are normal as a result.

A broader perspective can be found in the fact that the annual price increase in the year to August was 2.4 per cent, compared with 2.1 per cent in July. This is modest, but it is also the case that this still leaves average prices below 2022 levels before the recent market downturn.

This means affordability has improved, and things may be about to get better, as long as the economy continues to “recover steadily”, Nationwide chief economist Robert Gardner said.

Provided this happens, “housing market activity is likely to strengthen gradually as affordability constraints ease through a combination of modestly lower interest rates and earnings outpacing house price growth,” he remarked.

The reduction in the Bank of England base rate is another positive factor that will encourage buyers.

Although last month’s decision to reduce it from 5.25 per cent to five per cent came from a knife-edge 5-4 vote, suggesting the public should not expect another reduction at the next Monetary Policy Committee meeting on September 19th, it has encouraged lenders to reduce mortgage costs. Natwest, Barclays and HSBC have all just offered cheaper deals.

This combination of improved affordability with cheaper borrowing and prices still below 2022 peak levels will not last forever, so right now may be the ideal time to take advantage of it.