House price growth will be determined by the state of the job market and the wider economy following Britain’s vote leave the EU.
The annual pace of house price growth remained slow in June following the introduction of higher stamp duty in April, new figures show.
According to the latest Nationwide House Price Index, annual house price growth rose slightly to 5.1% in June, up from 4.7% in May.
Property prices rose 0.2% during the month to £204,968.
Nationwide said it was difficult to know the true rate of house price growth following the surge in activity ahead of the introduction of stamp duty on second homes in April.
Robert Gardner, Nationwide’s chief economist, said: “It will therefore be difficult to assess how much of the likely fall back in transactions in the quarters ahead is because buyers brought forward purchases to avoid additional stamp duty liabilities, and how much is due to increased economic uncertainty following the referendum result.
“Gauging the likely impact on house prices will be even more difficult. Ultimately conditions in the housing market will be determined by conditions in the wider economy, especially the labour market.”
Nationwide said that it was too early to assess the impact of the referendum on the economy, but the lack of homes on the market would provide support for prices even if demand softens.
Property prices in London have hit a new record high of £472,384, although house price growth has slowed from 11.5% in June to 9.9%.
The gap in average prices between the South and the North of England has increased to nearly £169,000, an increase of £24,000 from last year.
The North recorded a drop in average annual prices of 1% to £123,914. Scotland saw a slight rise in annual house prices of 0.5% to £141,245, while values in Wales increased by 0.9% to hit £145,973.
Jeremy Duncombe, director of Legal & General Mortgage Club, said: “Unsurprisingly house prices have levelled off this month during the build up to last Thursday’s vote. Undoubtedly, the next few weeks, and possibly months, will be a period of great uncertainty across all markets, not just the housing and mortgage markets.”
Jeremy Leaf, a former RICS chairman and north London estate agent, said: “The outlook for London is different from the rest of the country because affordability was already stretched and we were already seeing problems for the market due to overpricing and oversupply.
“More growth is likely to be seen outside the capital rather than inside in future months. Clearly we are going to have to see what impact the referendum vote had on prices and activity in the next set of figures.”
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