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House price growth falls to four-month low

Joanna Faith
Written By:
Joanna Faith

UK house prices grew by just 0.5 per cent year-on-year in June as political uncertainty continues to dampen market sentiment.

Annual house price growth remained below 1 per cent for the seventh consecutive month, according to the latest Nationwide House Price Index, coming in slightly below the 0.6 per cent rate recorded in May.

June’s rate was the worst since February when it was 0.4 per cent, the data shows.

The average house price in the UK rose to £216,515 from £214,946 between May and June.

Nationwide chief economist, Robert Gardner, said: “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.”

Sam Mitchell, chief executive of online estate agent Housesimple, said: “This growth, albeit marginal, demonstrates the resilience of the UK property market and reflects underlying favourable economic factors such as low unemployment and low interest rates.

“It’s remarkable, given the heightened political uncertainty in the UK surrounding Brexit, that we are still seeing growth in house prices at all.”

Best and worst performing regions

From a regional perspective, Northern Ireland was the strongest performer in the three months to June, with house prices rising from 3.3 per cent to 5.2 per cent.

England remained the weakest performer with prices essentially flat compared with a year ago.

In London, prices fell for the eighth quarter in a row. However, the annual pace of decline moderated to 0.7 per cent from 3.8 per cent the previous quarter.

Prices in the capital are now only 5 per cent below the all-time highs recorded between January and March 2017 and around 50 per cent above their 2007 levels.

“London has stabilised dramatically with a remarkable bounce back from pretty dire quarterly growth figures earlier in the year,” said Lucy Pendleton, founder director of estate agents James Pendleton.

“On the doorstep, it was clear the capital’s buyers shot back into the swing of things as soon as Britain’s first set of Brexit goal posts came and went in March without incident.

“The strong way London rebounded is also testament to the fact the capital remains a very special case because there is so much pent-up demand. Buyers there are highly sensitive to price falls and you don’t need to go far to find buyers, unlike in the regions.”