Article in bbc.com. “UK house prices in September rose by 3.2% compared with a year ago – the fastest rate for nearly two years, according to Nationwide.
The building society said that annual growth was the highest since November 2022, with terraced homes driving the increase.
It said rising incomes and mortgage rate cuts were improving affordability for buyers. Separate data from the Bank of England also showed mortgage approvals at their highest level for two years..” Article in bbc.com.
Home prices are rising, is the economic growth also rising too?
Article in Bloomberg.com: “The UK economy grew more slowly than thought in the second quarter, suggesting the recovery from recession was already losing steam as Labour came to power.
Gross domestic product rose 0.5%, the Office for National Statistics said on Monday, a downgrade from its previous estimate of 0.6%. It follows growth of 0.7% in the first quarter. Economists had expected no revision..” Article in Bloomberg.com:
Home Prices? Supply, emotions and the FOMO sometimes take over
It’s clear that the UK economy while it’s still growing is not as strong as it seems. However, we need to also know if the supply of housing has been able to keep pace with demands. This, coupled with the fact that sometimes, for some areas we love, we will quickly move in when we realized prices are moving upwards. This is despite the fact that we could have considered some other less popular places which could actually be cheaper! Yeap, this is why home prices are always driven by emotions, especially the Fear of Missing Out (FOMO) which could also happen too.
Frankly, if the economy continues to show a very slow growth, home prices should also stay grounded. Else, prices could be moving way too fast versus fundamentals yeah. Happy understanding again that while economic growth usually drives property prices in general but property prices could also be driven by many other factors too even if the economy is not really all that healthy.
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