Average prices were 2.4% higher year on year, a marginal increase from the 2.1% logged in July and the fastest pace since December 2022 (2.8%)
Nationwide says UK house prices dropped by 0.2% month on month in August, after taking account of seasonal effects, but the annual rate of house price growth continued to edge higher.
Average prices were 2.4% higher year on year, a marginal increase from the 2.1% logged in July and the fastest pace since December 2022 (2.8%). Nevertheless, prices are still almost 3% below the all-time highs logged in the summer of 2022.
While house price growth and activity remain subdued by historic standards, they nonetheless present a picture of resilience in the context of the higher interest rate environment and where house prices remain high relative to average earnings which makes raising a deposit more challenging, according to Nationwide chief economist Robert Gardner.
Providing the economy continues to recover steadily, as we expect, housing market activity is likely to strengthen gradually as affordability constraints ease through a combination of modestly lower interest rates and earnings outpacing house price growth, he said.
Mark Harris, chief executive of mortgage broker SPF Private Clients, says: With agents reporting activity levels up as much as 20% on the same period last year, the housing market is on a firmer footing and buyer and seller confidence is noticeably stronger. If that isn’t filtering through into higher prices month-on-month that is likely to be down to affordability constraints caused by higher mortgage pricing.
There is pent-up demand created by buyers waiting for the much-anticipated first rate cut. With lenders subsequently lowering their mortgage rates, launching sub-4% five-year fixes, the days of rock-bottom mortgages may be long gone but more palatable pricing is helping sentiment, he said.
Now that the BoE has cut rates, it sends out a strong message that they have not only peaked but are on a downwards trajectory after months of uncertainty. It enables people to make decisions with confidence and we anticipate a strong autumn market although the Budget looms ominously, he said.
