By Maximilian Clarke
Mean house prices across the UK edged up by 0.4% during October, Nationwide’s monthly House Price Index reveals, compared to September’s increase of 0.1%.
Upwards pressure came from wealthier neighbourhoods, which have seen an increase in housing activity.
“Given the challenging economic backdrop, October’s data is encouraging,” commented Nationwide Chief Economist, Robert Gardner, “but it doesn’t fundamentally change the picture of a housing market that is treading water. Property transaction levels remain subdued, and prices essentially flat compared to last year.”
The pattern of house price sales has largely remained constant, though house sales in more affluent areas have continued to increase in value and number at a faster rate than the average.
“In particular, the proportion of house purchases in areas classified as ‘Wealthy Achievers’ has risen by three percentage points since 2008,” continued Gardner. “These areas tend to be populated by those in managerial and professional occupations, and often include larger homes in suburban and rural locations.”
This change has in part been driven by growth in employment among higher earners, fuelling growth in wealthier neighbourhoods; and falling employment among lower earners.
“Over the same period, employment amongst process, plant & machine operatives has fallen 13%. Coupled with negative real wage growth, this is likely to have dampened activity amongst ‘Moderate Means’ and ‘Hard Pressed,’” concluded Gardner.
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