House prices in the UK increased in the last year but the rate of growth has slackened to a five year low, the latest figures have revealed.
The Nationwide House Price Index reports a rise of 2% over the last year across the UK, and a 0.5% increase during the month of June.
Houses in the East Midlands showed the strongest growth, soaring by 4.4% year-on-year to June and Wales was the best performing home nation with growth of 4%.
London was the only region where prices fell. But while they tumbled by 1.9% in the year Nationwide pointed out the cost of homes in the capital was still more than 50% above their 2007 peak compared to the UK overall where it was 15% higher.
Robert Gardner, Nationwide’s chief economist, said: “Looking further ahead much will depend on how broader economic conditions evolve, especially in the labour market and but also with respect to interest rates.”
He added: “Overall, we continue to expect house prices to rise by around 1% over the course of 2018.”
Uncertainty
Indeed, the nation’s economic uncertainty has been widely cited by experts as the reason for the recent slowdown in house price growth.
Jonathan Samuels, CEO of property lender Octane Capital, said prices may have ‘nudged up’ slightly in June but the market overall was in marked slowdown mode.
“With Brexit on the horizon, households feeling the pinch and interest rate uncertainty lingering, a lot of prospective buyers are sitting tight,” he said.
“Nationally, we’re witnessing revenge of the regions, with the East and West Midlands in especially barnstorming form. Wales also has a significant spring in its step.”
Meanwhile Jeremy Leaf, north London estate agent and former Royal Institution of Chartered Surveyors (RICS) residential chairman, said the squeeze on incomes and unrealistic asking prices was reducing activity and confidence to move, particularly in price-sensitive areas such as London.
He added: “On the other hand, the market continues to be supported by low interest rates and overall supply shortages, although we have found recently that listings and viewings are on the rise.
“This will translate into more sales if buyers and sellers recognise the new market realities.”
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