House prices slow in summer but little changes in demand
Average annual house price growth in August slowed towards the end of summer, new research has revealed.
Nationwide, which published the figures, found that annual house price growth dipped slightly to two per cent in August 2018, a 0.5 per cent decline compared to the month previously.
This represents the largest month-on-month fall since July 2012, the report shows.
But Robert Gardner, Nationwide’s chief economist, suggests the slowing is little to worry about.
He says while August saw a significant drop in terms of monthly outlook, house prices have been growing steadily at a rate of two to three per cent per month over a 12 month period – suggesting little has changed in the balance between supply and demand in the market.
“Looking further ahead, much will depend on how broader economic conditions evolve, especially in the labour market, but also with respect to interest rates,” he said.
“Subdued economic activity and ongoing pressure on household budgets is likely to continue to exert a modest drag on house price growth and market activity this year, though borrowing costs are likely to remain low.”
He adds that house prices are expected to rise by an average of around one per cent over the course of 2018.
The report also shows that the various Help to Buy schemes have played a significant role in boosting the market. The figures reveal that 48,000 Help to Buy Equity Loan completions took place in the 12 months to March 2018, an increase of 21 per cent on the previous year and accounting for around eight per cent of all house purchase mortgages in England over the same period.