UK house prices continue to rise
House prices across the UK have continued to rise despite warnings over the potential effect of the Brexit vote and changes to stamp duty rules.
Figures from Nationwide - the country’s second-biggest mortgage lender - showed that prices in August were up 5.6 per cent on a year ago - a slight increase in growth over the 5.2 per cent rise recorded in July.
According to Nationwide’s statistics, that makes the average British home worth £206,145.
The rise is the highest since a spike of 5.7 per cent in March, which came ahead of the changes to Stamp Duty rules at the start of April, and comes despite a softening of the market in recent months.
Commenting on the figures, Robert Gardner, Nationwide’s chief economist, said: “The pick up in price growth is somewhat at odds with signs that housing market activity has slowed in recent months. New buyer enquiries have softened as a result of the introduction of additional stamp duty on second homes in April and the uncertainty surrounding the EU referendum. The number of mortgages approved for house purchase fell to an 18-month low in July.
“However, the decline in demand appears to have been matched by weakness on the supply side of the market. Surveyors report that instructions to sell have also declined and the stock of properties on the market remains close to 30-year lows. This helps to explain why the pace of house price growth has remained broadly stable.”
Mr Gardner said that the longer-term outlook for the housing market was still unclear and would be largely determined by labour market conditions and buyer confidence.
He added: “It is encouraging that the unemployment rate remained at a ten-year low in the three months to June, though labour market trends tend to lag developments in the wider economy. It is also positive that retail sales increased at a healthy rate in July, up almost 6 per cent compared to the previous year, even though consumer confidence fell sharply during the month.
“However, business surveys suggest that the manufacturing, services and construction sectors all slowed sharply in July, and, if sustained, this is likely to have a negative impact on the labour market and household confidence.”