UK house prices edge higher despite monthly dip

The UK’s house prices saw a modest year-on-year increase in August despite a slight monthly decline from July’s figures, Nationwide reports.

Its house price index reveals that average house prices rose by 2.4% year-on-year, up from 2.1% in July.

This marks the fastest pace of annual growth since December 2022.

However, prices dipped by 0.2% between July and August.

‘Subdued by historic standards’

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

‘Stability across the housing sector’

Nathan Emerson, the chief executive of Propertymark, said: “Considering the number of disruptions within the economy across the last few years, it’s extremely encouraging to see stability across the housing sector.

“When politicians return from their summer recess in September, it is essential to see progression in delivering nearly two million homes across the next parliamentary term as promised by the UK Government.”

Sarah Coles, the head of personal finance at Hargreaves Lansdown, said: “Buyers went away in August – but only as far as the sun lounger – and they’ll be back.

“Slight improvements in affordability should help tempt them back into the fray.

“And while concerns about what the Budget has in store will weigh a little on sentiment, you can still expect house prices to trend gently up from here.”

Tom Bill, the head of UK residential research at 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, which doesn’t necessarily chime with recent government warnings about the state of the economy.”

Lomond‘s chief executive, Ed Phillips, said: “It’s been a story of two halves for the UK property market so far this year, with a tentative first six months seeing a stable but largely static market, whilst the pace has really started to pick up since the July election, with an increase in buyer confidence helping to drive annual house price performance.”

Share This Article