House prices increased £26k in year to June but growth is now slowing, says Nationwide

Typical home added £26k in value in the last year with the South West seeing strong growth but prices are now slowing slightly, Nationwide says

  • Year-on-year price growth slowed to 10.7% in June, down from 11.2% in May
  • South West overtook Wales as strongest performing region with 14.7% rise
  • Average UK house price now stands at a record high of £271,613

The rate of house price growth in Britain slowed slightly in June, rising 10.7 per cent from the year before, down from 11.2 per cent in May.

The average property price still hit a record high of £271,613, with prices increasing by more than £26,000 in the past year. 

Monthly, house prices are still growing, with a seasonally adjusted 0.3 per cent uptick from May to June, according to Nationwide Building Society. 

London continues to have the slowest house price growth, despite having the most expensive properties

This was the eleventh consecutive month when house prices had increased. 

But the index showed that house price increases slowed down in 9 of the UK’s 13 regions in June.

Robert Gardner, Nationwide’s chief economist, said: ‘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’. 

However, he added that there were ‘tentative signs of a slowdown’ in the housing market, as the cost of living crisis intensifies and mortgage interest rates continues to rise. 

‘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,’ he added. 

England has the most expensive average price of £309,774, followed by Wales at £208,309 and Northern Ireland where the average price is £181,550. 

South West topples Wales as region with biggest rises

The South West overtook Wales as the strongest-performing region in the second quarter of 2022, with house prices up 14.7 per cent year-on-year, a slight increase from the previous quarter. 

This was closely followed by East Anglia, where annual price growth remained at 14.2 per cent.

The South West has seen significant growth since the start of the pandemic and prices grew the fastest in the region over Q2 compared to the rest of the UK

The South West has seen significant growth since the start of the pandemic and prices grew the fastest in the region over Q2 compared to the rest of the UK

Responding to the index, Tomer Aboody, director of property lender MT Finance, said: ‘With interest rates rising along with inflation, a slowdown in growth is not surprising. 

‘However, there is still evidence of confidence in the market due to the desire to buy and take advantage of mortgage rates before they increase further.

‘The South West saw the biggest increase in prices due partly to comparatively lower values to start with but also down to the extra space which house buyers are able to buy in these locations compared with London. 

‘The capital remains the most expensive part of the country in which to buy property, which is why it is seeing the slowest growth due to problems with affordability and relative lack of buyers able to buy.’

Since the pandemic the South West has seen sustained house price growth. Since Q1 2020 house prices have risen 27.7 per cent, after taking account of seasonal effects. 

The area is followed by Wales, where average prices rose 26.2 per cent and in the North West, prices were up 25.8 per cent.

In contrast London has seen the slowest rate of growth over the period. House prices in the capital have risen by 14.9 per cent since early 2020.

These figures are also reflected over the last quarter. Price growth in the North West climbed to 13.3 per cent year-on-year, from 12.4 per cent in the first quarter.

London remained the weakest performing UK region, with annual price growth slowing to 6.0 per cent, from 7.4 per cent in the previous quarter.

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