The UK housing market experienced its peak for the year and is now in a cool off period, according to Nationwide. Although it is estimated to be quite a slow process.  There are several factors supporting a strong housing market, including low interest rates, a vital labour market and continued strong demand from potential house buyers. 

Nationwide commented on the factors leading to a strong housing market, saying: "During September, activity in the housing market has moderated, with a slowdown in demand and house price growth. However, with continuing low interest rates and a strong labour market, underlying demand is expected to remain robust.”

The latest data within the housing market proved to be quite telling. Annual growth slowed in October to just below 10%. Gross mortgage lending equaled more than £13 billion over the first half of the year, which comprised more than 12% of the entire market.

Like many others close to the UK housing market, Nationwide also does not see the interest rates to increase any time before the month of April, next year.

The building society added to its comments regarding the possible rise in interest rates, saying: "With few signs that inflationary pressures are building, and renewed concerns about a slowdown in the eurozone, we do not expect the Bank of England base rate to rise before the start of our next financial year, with future rises being gradual in nature and settling below pre-crisis levels.”

The lack of urgency in the Bank of England’s decision to deviate from the current interest rate level is creating subdued performance in the housing market, compared with strong demand earlier in the year. Original mortgage lending is being affected as well as remortgage activity.