The average price of a home in the UK is now £211,6712 – up slightly on last month but with growth slowing, according to data from the Nationwide.
The annual pace of house price growth moderated to 2.1 per cent in August, from 2.9 per cent in July. The slowdown in house price growth to the 2.0 to 3.0 per cent range in recent months from the 4.0 to 5.0 per cent prevailing in 2016 is consistent with signs of cooling in the housing market and the wider economy” says the building society.
It says the economy grew by about 0.3 per cent per quarter in the first half of 2017, around half the pace recorded in 2016. The number of mortgages approved for house purchase moderated to a nine-month low of around 65,000 in June and surveyors have reported softening in the number of new buyer enquiries.
“Nevertheless, in some respects the slowdown in the housing market is surprising, given the ongoing strength of the labour market. The economy created a healthy 125,000 jobs in the three months to June and the unemployment rate fell to 4.4 per cent – the lowest rate for over 40 years. In addition, mortgage rates have remained close to all-time lows” notes Nationwide’s chief economist, Robert Gardner.
“It may be that mounting pressure on household finances is exerting a drag. Wages have been failing to keep up with the cost of living in recent months and consumer sentiment has weakened. While measures of housing affordability are not particularly stretched at a UK level, pressures are evident in some regions – especially London and the South of England” he adds.
He says that, as before, a shortage of supply is likely to keep house prices high.
“The stock of homes on estate agents’ books remains close to 30-year lows and the number of new homes coming onto the market remains subdued. As a result, we continue to expect prices to rise by around 2.0 per cent over 2017 as a whole” he adds.
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