House prices grew at a stable yearly rate of 2.9% in July, dipping only slightly below the annual pace of 3.1% recorded in June, according to a new house price index.
The figures come from the latest Nationwide house price index, which also reported modest month-on-month growth at 0.3%.
“On the surface, this appears at odds with recent signs of cooling in the housing market,” commented Robert Gardner, Nationwide's Chief Economist.
“The number of housing transactions dipped to their lowest level for eight months in June, while in the same month the number of mortgages approved for house purchase moderated to a nine-month low of c.65,000.
“But a lack of homes on the market appears to be providing support, with annual house price growth remaining only just outside the 3-6% range, that has been prevailing for most of the past two years.
“This pattern looks set to be maintained in the near term. Survey data point to relatively sluggish levels of new buyer enquiries, but at the same time surveyors report that relatively few properties are coming onto the market."
Meanwhile, Jeremy Leaf, north London estate agent and former RICS residential chairman, said:
"Although these figures on the face of it look quite encouraging when one considers the fall in transactions, it is clear that prices are being supported by a lack of property on the market. We would have expected transactions in particular to be higher compared with last year bearing in mind how much quieter the market was 12 months ago following the introduction of the stamp duty surcharge.”
However, Leaf also states that activity could be much lower bearing in mind current political uncertainty: “…fortunately there does seem an enthusiasm among serious buyers and sellers to get on with the job in hand. The current climate is also providing an opportunity for first-time buyers at least to better compete for smaller properties."
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