The most recent Nationwide property index has revealed that property prices in the UK rose by 0.3% in July to reach an average of £211,671.
This pushed values 2.9% greater than what they were at the same time last year.
Though the annual growth rate has fallen from the 3.1% recorded in June, yearly house price growth is now only just outside the 3%-6% range seen for the majority of the last two years.
Robert Gardner, Chief Economist at Nationwide, suggests that the figures show that the British housing market is largely stable. He predicts that this is set to continue, at least for the short-term.
Gardner observed: ‘On the surface, this appears at odds with recent signs of cooling in the housing market. 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 around 65,000.’
‘But a lack of homes on the market appears to be providing support. 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 and at a time when the number of homes on estate agents’ books is already close to 30 year lows.’
Continuing, Mr Gardner said that, ‘Ultimately, housing market developments will depend on wider economic performance. The UK economy slowed noticeably in the first half of the year and there has been little to suggest a significant departure from recent trends in the quarters ahead.’
‘While employment growth has remained relatively robust, household budgets are coming under pressure as wage growth is failing to keep up with the rising cost of living. This suggests that housing market activity is likely to remain subdued, with the balance in the market shifting a little further towards buyers in the quarters ahead.’
Citing supply issues, Mr Gardner concluded by saying: ‘Constrained supply is likely to continue to provide support for house prices and, as a result, we continue to expect prices to rise by around 2% over 2017 as a whole, only modestly lower than the levels recorded in recent months.’
Mark Weedon, Head of Institutional Development at buy-to-let investment platform Property Partner, believes that the figures are a sign of stability.
‘Despite uncertainty across the political spectrum, with the realities of Brexit slowly starting to become more clear, house prices again demonstrate their resilience. Simply put this index highlights the strength and stability of the housing market. Mortgages look set to remain good value and the lack of housing stock nationally shows no sign of abating, something which will continue to support house prices,’ Mr Weedon stated.