The latest Nationwide House Price Index (HPI) for June reveals that annual house price growth has slowed, but remains in double digits.
Newly released Nationwide HPI figures show a modest slowing in annual UK house price growth to 10.7% in June, from 11.2% in May. Back in March, annual growth was at 14.3% – its highest in almost eight years, but during June however, prices grew just 0.3% (seasonally adjusted) and is the third consecutive month with under 1% growth.
Regionally, the South West overtook Wales as strongest performing region, while London remained weakest.
Commenting on the figures, Robert Gardner, Nationwide’s Chief Economist, said:
“UK annual house price growth slowed modestly to 10.7% in June, from 11.2% in May. Prices rose by 0.3% month-on-month, after taking account of seasonal effects, the 11th consecutive monthly increase.
The price of a typical UK home climbed to a new record high of £271,613, with average prices increasing by over £26,000 in the past year.
There are tentative signs of a slowdown, with the number of mortgages approved for house purchases falling back towards pre-pandemic levels in April and surveyors reporting some softening in new buyer enquiries. Nevertheless, the housing market has retained a surprising amount of momentum given the mounting pressure on household budgets from high inflation, which has already driven consumer confidence to a record low.
The market is expected to slow further as pressure on household finances intensifies in the coming quarters, with inflation expected to reach double digits towards the end of the year. Moreover, the Bank of England is widely expected to raise interest rates further, which will also exert a cooling impact on the market if this feeds through to mortgage rates.”
Managing Director of HBB Solutions, Chris Hodgkinson, commented:
“There’s no doubt that the property market has performed impressively during the pandemic but this rate of growth simply isn’t sustainable in the long-term and we’re now seeing early signs that the winds of change are beginning to pick up.
We’ve already seen mortgage approval levels start to slide and the lagged nature of the transaction process means that it won’t be long before this materialises in the form of both a reduction in transactions and the price paid in the process.”
Sarah Coles, senior personal finance analyst, Hargreaves Lansdown, commented:
“House price rises have slowed to a crawl. The annual figures look impressive at 10.7%, but for the past three months we’ve seen less than 1% growth each month, and 2.6% growth in total. It’s like lunchtime for a mountain climber. If you focus on how far you climbed earlier, it’s easy to miss the fact you’re not going anywhere in a hurry right now. The question for any climber is what comes next: more slow progress or a fall?”
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