House prices nudge up in “subdued” property market
House prices rose just 0.2 per cent between May and June this year, as activity in the market remained “fairly subdued”.
The Nationwide House Price Index found the housing market, which has been moribund for much of the year, continued to be outstripped by wages and inflation, having fallen in April and March.
On an annual basis, the index from the UK’s largest mutual found that UK house prices were up 1.5 per cent in June of last year, with Northern Ireland revealed as the best-performing region.
According to the building society, the average price of a home in the UK is now £266,064, with homes in London averaging over double that, at £525,248.
Robert Gardner, Nationwide’s chief economist said: “UK house prices edged up by 0.2 per cent in June, after taking account of seasonal effects.
“This resulted in the annual rate of growth rising from 1.3 per cent in May to 1.5 per cent in June, leaving prices around three per cent below the all-time high recorded in the summer of 2022.”
Nationwide’s findings mirror those of the property listing’s site Zoopla, which published its own index last week. Alongside its index, Zoopla cautioned that the typical house is currently listed at nearly £20,000 above the level that would be affordable to most households, meaning prices are unlikely to take off in the second half of 2024.
Activity in the housing market remained slow in June, with transactions down by around 15 per cent compared with 2019 levels, as buyers wait for rates to come down, and sellers sit on their hands hoping for an uptick in house prices.
Transactions involving a mortgage have fallen even further – over 25 per cent lower than the highs of five years ago – as higher borrowing costs bite. By contrast, the number of cash buyers is actually up five per cent on pre-pandemic levels, as those with the means to do so take advantage of higher rates’ dampening effect on prices.
Gardner added: “While earnings growth has been much stronger than house price growth in recent years, this hasn’t been enough to offset the impact of higher mortgage rates, which are still well above the record lows prevailing in 2021 in the wake of the pandemic.”
House prices in London are up 1.6 per cent year-on-year, the survey found, and was the best performing region in southern England, which has been considerably outperformed by the North for much of the past year.
East Anglia saw the largest fall in prices of any region, with homes down 1.8 per cent, while house prices in Northern Ireland were up 4.1 per cent in Q2, topping the regional list.
Commenting on the index, Matt Thompson, head of sales at Chestertons, said: “House hunters have been feeling uncertain amid political and financial developments. But with change on its way, they have become more confident to resume or finalise their property search. As a result, June concluded with a heightened level of buyer activity.”