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Annual house price growth remains below 1% for the eighth successive month, says Nationwide

Annual house price growth remains below 1% for the eighth successive month as property values inch up in July

  • Nationwide’s latest house price index revealed the market remained sluggish
  • Prices rose 0.3% both year-on-year and monthly
  • The 0.3% monthly rise represented the joint-highest this year along with April
  • Nationwide said political uncertainty continued to act as a drag on the market 

Annual house price growth remained sluggish in July as prices inched up by just 0.3 per cent on the previous month, according to the latest data from Nationwide.

The building society’s July house price index, which showed an annual rate of growth also at 0.3 per cent, suggests that house prices have not risen by more than one per cent year-on-year since last November.

Its chief economist Robert Gardner said while new buyer inquiries have increased a little, ‘key consumer confidence indicators remain subdued’.

Nationwide said while the number of mortgages approved has remained broadly stable, there had been a slowdown in activity when it came to actual transactions

‘Data on the number of property transactions points to a slowdown in activity, though the number of mortgages approved for house purchase has remained broadly stable,’ he said.

He added housing market trends will remain ‘heavily dependent on developments in the broader economy’, with Brexit-related uncertainty likely continuing to act as a drag.

House prices also grew 0.3 per cent compared to last month, which though small amounts to the joint highest month-on-month rise in house prices in 2019. April also saw the same monthly change, while prices fell in both February and May.

The average house price now sits at £217,663, almost £60,000 higher than where the market stood 10 years ago in the aftermath of the financial crisis.

While first-time buyer numbers have nearly recovered to levels before the crisis, there is a continued weakness in home mover activity, which is still less than half 2007 levels, Mr Gardner said.

He added: ‘Taking a longer-term view, housing market activity has been broadly stable in recent years, with the number of properties changing hands equal to around 5% of the total number of homes in the UK.

‘This turnover rate of around 5 per cent is significantly higher than the lows seen in 2009, but is still well below the rates of 8 per cent seen pre-crisis.’

Former RICS chairman and north London estate agent Jeremy Leaf said Nationwide’s figures ‘confirm what we are finding on the ground – that the market is very much in limbo on the one hand underpinned by near record low mortgage rates and improving affordability but on the other, not moving ahead as we might have expected’.

‘Fortunately, first-time buyers are slowly returning, taking advantage of buy-to-let landlord caution following various tax and regulation changes,’ he added.

‘Looking forward, we don’t expect the situation to change too radically until there is more clarity on the political front, although there is no doubt some buyers are looking beyond Brexit and making the most of more realistic pricing.’

Mark Harris, the chief executive of mortgage broker SPF Private Clients, said a lack of properties on the market was at least partly responsible for low numbers of people moving home, despite first-time buyer numbers recovering.

He added: ‘The cost of moving is also having an impact, with homeowners remortgaging and releasing cash to improve their homes, rather than shelling out tens of thousands of pounds on stamp duty.

‘The number of mortgages approved for house purchase remains broadly stable with lenders keen to lend.’

Read more at DailyMail.co.uk


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