Good morning, we start the week with news that UK house prices have risen at their fastest pace since the aftermath of the mini-budget two years ago.
Lender Nationwide has reported that the average UK house price rose by 3.2% in the year to September, the quickest annual increase since November 2022. On a monthly basis, prices rose by 0.7%, picking up pace after a 0.2% drop in August. This lifted the average price to £266,094 this month, up from £265,375 in August.
Recent falls in mortgage rates appear to have stimulated the market, with the Bank of England having begun cutting Bank Rate in August.
Robert Gardner, Nationwide’s chief economist, explains: “Income growth has continued to outstrip house price growth in recent months while borrowing costs have edged lower amid expectations that the Bank of England will continue to lower interest rates in the coming quarters. These trends have helped to improve affordability for prospective buyers and underpinned a modest increase in activity and house prices, though both remain subdued by historic standards."
If you look at property types, terrace houses have seen the biggest percentage rise in prices over the last 12 months, with average prices up 3.5%, Nationwide adds. Semi-detached and flats recorded increases of 2.8% and 2.7%, respectively, while detached houses gained more modest growth of 1.7%.
However, since the pandemic, it’s detached homes that have risen the fastest in price, lifted by the ‘race for space’ triggered by Covid-19. Since the first quarter of 2020, the price of an average detached property increased by nearly 26%, while flats have only risen by about 15% over the same period.
Nationwide reports that prices rose fastest in Northern Ireland, up 8.6% year-on-year in during the last quarter, with East Anglia the weakest performing region, with prices down 0.8% over the year.
Rightmove has rejected the fourth takeover offer from Australia’s Rea group, which valued the UK property portal worth £6.2bn.
Rightmove has told the City it has “fully reviewed the latest proposal with its financial and legal advisers”, and decided it cannot recommend it to shareholders.
It says: "The board has taken into consideration the views of its shareholders and also considered the representations from the chair and management team of REA … The board has concluded that the latest proposal remains unattractive and continues to materially undervalue Rightmove and its future prospects and that the board cannot recommend [it] to Rightmove shareholders."
Rea Group still has until 5pm today to either make another firm offer for Rightmove, or walk away. Ideally, it would want to have the board’s backing, though, rather than be forced to go hostile.
The agenda
• 7am: Nationwide house price index for September
• 7am BST: UK Quarterly Sector Accounts and balance of payments for April-June
• 9.30am BST: Bank of England mortgage approvals and credit data
• 1pm BST: Germany’s inflation report for September
• 2pm BST: ECB president Lagarde appears before Economic and Monetary Affairs committee of the European parliament
We’ll be tracking all the main events throughout the day ...
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