House prices slow

That puts the annual house price growth at 5 per cent.

The three-month growth rate clearly shows the slowing trend in house price inflation since March.

Prices increased by one per cent in the three months to June, compared with 1.6 per cent to May and 2.1 per cent in the three months to March.

Fionnuala Earley, Nationwide’s Group Economist, said: “The typical price of a house is now £165, 730, around £8,000 more than this time last year and equivalent to a rise of almost £22 per day.

“Mortgage payments for someone on average earnings now take up around 40 per cent of take home pay compared with around 32 per cent three years ago.”

However, while demand seems fairly stable, the deterioration in affordability and its likely impact cannot be ignored.

As affordability affects the ability to purchase, rental becomes a more attractive proposition for potential owner-occupiers.

Earley said: “While paying rent may still be more expensive than mortgage payments, raising the deposit and meeting lenders’ income multiple requirements may mean that rental is the only option in the short term.”

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