House prices rose 1.1 per cent in the month to June on a seasonally adjusted basis, reversing the previous three months’ falls, the latest Nationwide House Price Index has found.
Prices also rose on an annual basis, increasing by 3.1 per cent, according to the index, with the average UK house now valued at £211,301.
In May, the index found that prices had fallen 0.2 per cent.
Nationwide chief economist Robert Gardner says: “The annual rate of house price growth, which gives a better sense of the underlying trend, continues to point to modest price gains. Annual house price growth edged up to 3.1 per cent from 2.1 per cent in May. In effect, after two sluggish months, annual price growth has returned to the 3-6 per cent range that had been prevailing since early 2015.
“There has been a shift in regional house price trends. Price growth in the South of England has moderated, converging with the rates prevailing in the rest of the country.
“In Q2 the gap between the strongest performing region (East Anglia, which saw 5 per cent annual growth) and the weakest (the North, with 1 per cent growth) was the smallest on record, based on data going back to 1974. Nevertheless, when viewed in levels, the price gap between regions remains extremely wide.”
In the three months to June, East Anglia was the strongest performing region, with average prices up 5 per cent year-on-year. London saw a notable slowing in growth to 1.2 per cent and was the second weakest region in Q2, just above the North (1.1 per cent).
Legal & General Mortgage Club director Jeremy Duncombe says: “House prices continue to rise above inflation. Whilst demonstrating the market’s resilience in the face of political uncertainty, this will be sobering news for many first-time buyers who are struggling to make their first step onto the ladder. For a healthier market, what we need to see is property prices rising in line with inflation.
“With Monday’s announcement of a coalition agreement, the newly-formed government must consider solutions to restructure our housing market and introduce measures that bring house price inflation in line with earnings. More affordable housing needs to be built to allow all those who wish to do so, a better chance of achieving homeownership. More than that, however, we also need to see incentives for home movers and last time buyers looking to downsize, so that we can get our housing market on the move.”