Nationwide warns over cool house prices
Lending giant Nationwide Building Society has cautioned over a cooling in house prices as budgets are put under pressure by the rising cost of living.
The society, which ranks as the second-biggest mortgage lender in the UK after Bank of Scotland-owner Lloyds Banking group, said that while some house prices have been increasing at double-digit rates so far this year, they could start easing.
Publishing its annual results, the society noted :“higher property prices and interest rates, together with steep increases in the cost of living, mean housing has become less affordable and we expect housing market activity to slow and the rate of house price growth to moderate in the coming quarters.
“There is a risk of a downward movement in house prices, given the pressure on household budgets.”
Inflation hit a 40-year high of 9 percent in the year to april, with predictions that it will head into double-digit territory over the summer. while unemployment remains low, this is still squeezing household budgets hard.
Nationwide chairman Kevin Parry said: “We will continue to plan for geopolitical risks and economic pressures arising directly and indirectly from the war in Ukraine, notably the rising energy bills and inflation, which are intensifying pressure on household budgets, which are already under strain.
“Given our financial strength, we are well-positioned to manage these impacts, as well as to evolve our services to meet our members’ changing needs,” he added.
The lender, which rescued the Dunfermline Building Society during the financial crisis, said that it had nearly doubled its underlying profit to £1.6 billion in the year to April 4.