Nationwide House Price Index: annual house price growth slows but still double digits
1st September 2022 07:54
by Myron Jobson from interactive investor
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A robust property market powers through the inflation storm – but hallmarks of slowdown are present.
Commenting, Myron Jobson, Senior Personal Finance Analyst, interactive investor, says: “The dizzying rise in house prices in August is indicative of a remarkably robust property market, which has powered its way through the cost-of-living storm.
“However, the housing market is exhibiting the hallmarks of a slowdown. New-buyer enquiries have waned in recent months and the number of mortgage approvals for house purchases has fallen below pre-pandemic levels, according to Nationwide – which suggests that concerns about ballooning inflation, rising mortgage rates and recession appear to be finally weighing on the market.
“The energy cap rise will eat into disposable income, making it harder for buyers to save for a deposit – and fast-rising rents are not offering any relief and could keep some buyers in the hunt for a home for longer than they would like.
“But even though the housing market is slowing, it is nowhere near a crash. Strong demand for homes far outstripping available housing inventory means the housing market remains a difficult one for wannabe homeowners and those looking to climb up the property ladder.
“After a period of stratospheric growth, it could be some time before we see steep declines in house prices. The supply-and-demand imbalance isn’t going away, even though the red-hot housing market has cooled in recent months.”
Key points:
- Annual UK house price growth slowed to 10.0% in August, from 11.0% in July.
- Prices up 0.8% month-on-month after taking account of seasonal effects.
- Average house price rises by almost £50,000 in two years.
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