Annual house price growth picked up in August says Nationwide

Annual house price growth picked up in August to the fastest rate since December 2022, according to an index.

Across the UK, property values increased by 2.4% annually, Nationwide Building Society said. This took the typical house price to £265,375. Robert Gardner, Nationwide’s chief economist, said: “UK house prices fell 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 up 2.4% year-on-year, a slight pick-up from the 2.1% recorded in July and the fastest pace since December 2022 (2.8%). “However, prices are still around 3% below the all-time highs recorded in the summer of 2022. “While house price growth and activity remain subdued by historic standards, they nevertheless present a picture of resilience in the context of the higher interest rate environment and where house prices remain high relative to average earnings. “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.” Yopa chief executive Verona Frankish said: “Today’s figures provide the first look at house price performance since interest rates were cut at the start of August and despite the very marginal monthly decline, it’s clear that the first reduction in four years has helped to further boost the market momentum, with yet another strong rate of annual house price growth being seen. “Whilst the base rate remains considerably higher than many buyers and sellers may be accustomed to, the expectation is that another cut will come before the year is out, which should only help to strengthen buyer appetites further.” Alice Haine, personal finance analyst at Bestinvest by Evelyn Partners, the wealth manager said: “The UK’s residential property market appears to be in recovery mode following the turbulence of 2023 when high borrowing costs and low supply stifled activity and dampened prices. “With more sub-4% mortgage rates now available and the prospect of more interest rate cuts this year, buyers are flooding back into the market as improving affordability levels raise the likelihood that people can net their desired home. “Meanwhile, sellers, who have been sitting on the sidelines waiting for better market conditions, now feel confident to list their homes, though those hoping for a good deal may find the glut of new properties for sale along with mortgage rates that are still relatively high could keep a lid on prices for now.” Mark Harris, chief executive of mortgage broker SPF Private Clients, said: “The days of rock-bottom mortgages may be long gone but more palatable pricing is helping sentiment. “Now that the Bank of England has reduced 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.” Tom Bill, head of UK residential research at estate agent Knight Frank, said: “The UK housing market is in a better place than it was last summer as inflation comes under control and lenders trim their rates. “Financial markets are pricing in another cut this year and as mortgage rates fall this autumn, it should underpin transactions and modest single-digit price growth.” Amy Reynolds, head of sales at London-based estate agency Antony Roberts, said: “It’s been a very successful month, with a large number of sales agreed in all price ranges at a time when agents usually complain it is quiet. “As the (Bank of England base) rate reduction was widely expected, we were ready – encouraging sellers to reduce their price, or launch their properties at the end of July/beginning of August, rather than wait until September as most would usually choose to do.” Iain McKenzie, chief executive of the Guild of Property Professionals, said: “Estate agents across the country are telling us that the market conditions in their areas are improving and there is a strong demand for good-quality housing. “A notable trend is the growing emphasis on energy-efficient homes, with buyers seeking properties with lower fuel bills and a smaller environmental footprint. This is particularly important right now as energy prices are set to rise again this winter.”

Published: 30/08/2024 by Radio NewsHub