Nationwide – Prices almost flat in June
Average house prices across the UK were almost flat in June with an increase of just 0.5 per cent on last year to £216,515, while London saw another decline, Nationwide Building Society’s latest index has shown.
Prices in the capital were down by 0.7 per cent to £465,722 for the three months to June compared to the same period last year, which was below the previous quarter’s annual fall of 3.8 per cent.
But Nationwide points out that London prices are still only around 5 per cent below the all-time highs recorded in 2017 and about 50 per cent above their 2007 levels, while UK prices are 17 per cent higher over the same period.
Northern Ireland posted the strongest performance this quarter with an annual increase of 5.2 per cent, bringing average prices to £143,343.
In Wales prices rose by 4.2 per cent to £160,407 and in Yorkshire and the Humber prices were up 3 per cent to £158,780.
Nationwide chief economist Robert Gardner says it was the seventh consecutive month in which UK annual house price growth remained below 1 per cent.
He says: “Survey data suggests that new buyer enquiries and consumer confidence have remained subdued in recent months. “Nevertheless, indicators of housing market activity, such as the number of mortgages approved for house purchase, have remained broadly stable.”
He adds: “While healthy labour market conditions and low borrowing costs will provide underlying support, uncertainty is likely to continue to act as a drag on sentiment and activity, with price growth and transaction levels remaining close to current levels over the coming months.”
Garrington Property Finders managing director Jonathan Hopper says: “London’s market is turning into a supernova. After years of burning with stellar brightness, its slowdown is now exerting a gravitational force on the national average.
“That gravity has even turned the South East’s markets inside out – with the outer London boroughs and the commuter belt now suffering the sharpest price falls while central London values settle.”
But he says the price correction is prompting increasing numbers of buyers to take the plunge, providing a boost to activity.
He adds: “From a price point of view, the national picture is getting more polarised, not less.
“In the weakest markets we’re seeing homes change hands for as much as 30 per cent below guide price, while in the hottest areas, premiums being paid over guide price are not unusual for the most sought-after homes.
“In the Southeast, what sellers there are tend to be those who have no choice but to put their home on the market – and as a result many are having to recalibrate asking prices or accept low offers.”
Source: Mortgage Strategy