House prices were up by 1.1% in June on a seasonally adjusted basis, according to a new house price index, thus reversing the decline in prices seen over the past three months.
The latest Nationwide House Price Index also reveals that prices have risen on an annual basis by 3.1%, taking the value of the average UK house to £211,301. This follow’s May’s index, which found prices had fallen by 0.2%.
Commenting on the figures, Robert Gardner chief economist at Nationwide, said:
“The annual rate of house price growth, which gives a better sense of the underlying trend, continues to point to modest price gains. Annual house price growth edged up to 3.1% from 2.1% in May. In effect, after two sluggish months, annual price growth has returned to the 3-6% range that had been prevailing since early 2015.”
On a regional basis, East Anglia was revealed to be the strongest performing region in the three months to June. Average house prices are up 5% year-on-year in this area. London, on the other hand, has experienced a slow-down in growth at 1.2%. This makes it the second weakest performing region, only slightly above the North, where prices rose by 1.1%.
“There has been a shift in regional house price trends. Price growth in the South of England has moderated, converging with the rates prevailing in the rest of the country.
“In Q2 the gap between the strongest performing region (East Anglia, which saw 5 per cent annual growth) and the weakest (the North, with 1 per cent growth) was the smallest on record, based on data going back to 1974. Nevertheless, when viewed in levels, the price gap between regions remains extremely wide.”
Jeremy Duncombe, Legal & General Mortgage Club director said:
“House prices continue to rise above inflation. Whilst demonstrating the market’s resilience in the face of political uncertainty, this will be sobering news for many first-time buyers who are struggling to make their first step onto the ladder. For a healthier market, what we need to see is property prices rising in line with inflation.
“With Monday’s announcement of a coalition agreement, the newly-formed government must consider solutions to restructure our housing market and introduce measures that bring house price inflation in line with earnings. More affordable housing needs to be built to allow all those who wish to do so, a better chance of achieving homeownership. More than that, however, we also need to see incentives for home movers and last time buyers looking to downsize, so that we can get our housing market on the move.”