Annual house price growth remained subdued in the UK in August, up just 0.6%, and unchanged month on month, after taking account of seasonal factors, the latest lender index shows.
The flat month on month figure follows a monthly gain of just 0.3% in the previous month. The average price was £216,096, according to the data from the Nationwide. Annual growth has now been below 1% for nine months in a row.
According to Robert Gardner, Nationwide’s chief economist, while house price growth has remained fairly stable, there have been mixed signals from the property market in recent months.
‘Surveyors report that new buyer enquiries have increased a little, though key consumer confidence indicators remain subdued. Data on the number of property transactions points to a slowdown in activity, though the number of mortgages approved for house purchase has remained broadly stable,’ he said.
‘Housing market trends will remain heavily dependent on developments in the broader economy. In the near term, healthy labour market conditions and low borrowing costs will provide underlying support, though uncertainty is likely to continue to exert a drag on sentiment and activity,’ he added.
Sam Mitchell, chief executive officer of online estate agent Housesimple, it is not a bad sign for the future. ‘It’s rare to see big spikes in property prices during the warmer weather and the annual growth, albeit marginal, should still be seen in a positive light. Particularly amidst the uncertainty of our country’s current political position,’ he said.
‘Home movers will likely be looking to strike fast to complete deals before we leave the European Union in the coming months. And buyers could follow suit, making faster decisions than usual. Who knows what will happen post Brexit but the worst thing people can do is sit on their hands and take the wait and see approach,’ he warned.
According to Kevin Roberts, director of the Legal & General Mortgage Club, even with innovation from lenders which has helped more first time buyers onto the housing ladder, people still face challenges when it comes to buying a home.
‘For some it’s the struggle of pulling together a big enough deposit, for others it’s about finding the right type of housing such as later life accommodation. The critical issue is that there are simply not enough homes to meet the demand from consumers, whether people buying their first property or those who want to downsize,’ he pointed out.
‘What we really need to see is a concerted effort to increase housing supply across the UK. The Government and industry must work together to build thousands more affordable homes across all tenures that can meet the needs of borrowers, young and old,’ he added.
Mike Scott, chief property analyst at full-service estate agent Yopa, describes the market as steady but slow. ‘We do not expect to see any significant change in the state of the market as we move into the autumn selling season, although political and economic uncertainty may cause some short term disruption around the Brexit deadline,’ he said.
‘We still anticipate that prices will end the year slightly higher than they were at the end of 2018. The direction of the market in 2020 will then depend on the Brexit outcome,’ he added.
