Financial News

  • 30 August 2014, 13:17

Annual House Price Growth Hits 11% Says Report

The slowdown in house price growth of recent months could have been short-lived, with home costs accelerating in August.

The Nationwide study calculated growth of 0.8% - the sixteenth successive monthly price rise - leaving the annual pace of house price growth up to 11% from 10.6% in July.

The report said that while the figures highlighted a growing gulf between housing costs and wage rises - most recently measured at -0.2% - affordability was not stretched by historic standards.

Its figures were released as separate Land Registry statistics - covering the year to July - measured growth of 7.2% nationally.

London house prices were found to have grown by 19.3% annually - the biggest year-on-year increase in the capital in more than a decade.

Robert Gardner, Nationwide's chief economist, said: "The outlook for the housing market remains highly uncertain.

"The number of mortgage approvals fell by almost 20% between January and May, suggesting that activity was cooling.

"However, there was a modest rebound in June and it is unclear how much of the slowdown was due to the introduction of Mortgage Market Review rather than an underlying loss of momentum.

"Surveyors report that new buyer enquiries have moderated somewhat in recent months, and the prospect of interest rate increases together with subdued wage growth may temper demand in the quarters ahead.

"However, the brightening economic outlook is likely to provide ongoing support for housing demand.

"Consumer sentiment remains buoyant thanks to declining inflation and sustained increases in employment."

He also pointed to the continuing weak supply of homes on the market as a factor likely to support price growth.

But separate research released by property analyst Hometrack has found the gap between house sellers' asking prices and the amounts that buyers are willing to pay is widening.

Hometrack said this pointed to the pace of house price increases slowing in the coming months.

 

Advertisement