That’s a solid beat on the estimate and it reaffirms the continued resilience in the UK housing market despite the economic and financial uncertainty from the Middle East conflict. The average price of a dwelling in the UK now rises further to £278,880. The annual change for house prices is +3.0%, marking the strongest change since May last year.
Nationwide notes that:
“Despite the uncertainty caused by developments in the Middle East and the subsequent rise in energy prices, the UK housing market has continued to regain momentum following the slowdown recorded around the turn of the year.
This is somewhat surprising given that indicators of consumer confidence have weakened noticeably. GfK’s headline index has fallen to its lowest level since late‑2023, reflecting households’ more pessimistic views of the economic outlook and their own financial position over the year ahead.
The market is likely being supported by the relative strength of household finances. In aggregate, household debt is at its lowest level relative to income for around two decades, and sizeable savings buffers have been built up in recent years, although these have not been evenly distributed across households.
Looking ahead, UK economic growth is likely to be somewhat weaker and inflation higher than previously expected as a result of developments in the Middle East, although the ultimate impact will depend critically on the duration of the shock and the policy response.
However, the UK economy and housing market have proved remarkably resilient in recent years. This provides some confidence that, if the latest shock passes relatively quickly, and energy prices normalise in the quarters ahead, any near-term softening in the housing market will also prove short lived.”
