Latest Nationwide HPI shows annual growth of 1.6% in August
UK annual house price growth remained broadly stable at 1.6% in August and up 0.2% month on month as the market continues to react to economic and geopolitical impacts. However, at £275,465 the average UK house price is now at a six-month low from its April peak of £278,880.
Robert Gardner, Nationwide’s chief economist, said: “Market activity and house prices have remained subdued in recent months, in part reflecting the uncertain economic backdrop. Geopolitical tensions remain high, with the conflict in the Middle East exerting upward pressure on energy prices and market interest rates.”
However, despite the challenges, Gardner has confidence in the market. He said: “Market expectations of the future path of Bank Rate have been volatile. While the latest energy price shock poses inflation risks, there have been encouraging signs that it is not feeding through to underlying price pressures. Indeed, private sector wage growth has eased further in recent months, which should give policymakers breathing space to assess the extent to which tighter policy is necessary to ensure inflation returns sustainably to target.”
Activity ‘should regain momentum’
“Underlying affordability is improving, as house price growth remains well below earnings growth, although some of these gains have been offset by higher mortgage rates. Nevertheless, this suggests that activity should regain momentum in the quarters ahead, providing the energy shock wanes and confidence returns, especially if market interest rates fall back towards pre-conflict levels.”
Jason Tebb, president of OnTheMarket, agreed: “The market has steadied, helped by a calm hand at the tiller from the Bank of England with consecutive interest rate holds allaying fears and helping with affordability.
“Should mortgage rates remain stable and economic uncertainty eases, this could filter through to renewed activity and sales in the autumn. Inactivity isn’t an option for many, even if a new Prime Minister and another Budget bring an inevitable degree of doubt.”
Nathan Emerson, CEO at Propertymark, also said the market had held up well, despite wider economic challenges. “Considering factors such as ongoing global unrest, it is positive to see the housing market deliver stability and overall consistency,” he said.
Rachel Springall, finance expert at Moneyfactscompare.co.uk, highlighted the recent Zoopla figures that showed searches for homes up 7% year on year. “This could be an encouraging signal that some buyers are becoming more willing to re-enter the market following a slower summer,” she said.
