House prices have grown by 2.4% over the last year despite dipping slightly between July and August.
This is according to the latest Nationwide House Price Index which revealed in August the housing market experienced the fastest pace of annual growth since December 2022.
Over the month of August house prices fell by 0.2% and average value of a property in the UK is now £265,375 compared to £266,334 in July.
Robert Gardner, Nationwide’s chief economist, said prices were still around 3% below the all-time highs recorded in the summer of 2022.
“While house price growth and activity remain subdued by historic standards,” he said, “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 (which makes raising a deposit more challenging).
“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.”
This growth has been welcomed by mortgage experts who say it provides further evidence the economy is recovering – albeit slowly.
Data from the Bank of England, which was also published today, showed the number mortgage approvals in July had increased to the highest level since September 2022.
The report showed 62,000 mortgages had been approved for house purchases in July compared to 60,600 in June.
Alice Haine, personal finance analyst at Bestinvest by Evelyn Partners, said: “The UK’s residential property market appears to be in recovery mode following the turbulence of 2023 when high borrowing costs and low supply stifled activity and dampened prices.
“With more sub-4% mortgage rates now available and the prospect of more interest rate cuts this year, buyers are flooding back into the market as improving levels raise the likelihood that people can net their desired home.”
