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House price growth dims in August: Nationwide

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House price growth was 2.1 per cent in August, compared to 2.9 per cent in July, according to the latest Nationwide house price index.

The average UK property is now worth £210,495, compared to £211,671 in July.

Nationwide chief economist Robert Gardner says: “The slowdown in house price  growth to the 2  3 per cent range  in recent months  from the 4  5 per cent prevailing in 2016 is  consistent with signs of cooling in the housing market and the  wider economy.” 

Mortgage Advice Bureau head of lending Brian Murphy says: “There are a number of factors which could be responsible for current market conditions; ongoing consumer demand and continuing lack of supply are perhaps maintaining prices at 10 per cent above the 2007 peak, whilst lack of wage growth is having an effect on mortgage affordability, meaning that those coming to the market currently do have an upper limit in terms of borrowing, which of course suggests that vendors have to be realistic about pricing in order to sell.”

Murphy adds that a shortage of buy-to-let investors, due to income tax and stamp duty land tax changes, is affecting the figures.

Octane Capital chief executive Jonathan Samuels says: “Despite the strength of the jobs market and the record low mortgage rates available, the cooling of the property market is no paradox when you factor in the impact of rising inflation, low wage growth and ongoing consumer uncertainty around the longer term impact of Brexit.

“Essentially, people are feeling the pinch and that will always impact property prices.

“But the property market can only cool so much given the ongoing lack of supply. When there are so few properties for sale and being built, prices can only go so low.”

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