House prices in the UK fell by 0.5 per cent from July to August, seasonally adjusted figures released today in Nationwide’s monthly house price index show.
On an annual basis, house price growth stood at 2 per cent, leaving the average house price (not seasonally adjusted) at £214,745 as compared to the £217,010 reported last month.
The building society reports that it expects house prices to rise by “around 1 per cent” over the course of 2018.
Nationwide chief economist Robert Gardner says: “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.”
Emoov.co.uk founder and chief executive Russell Quirk comments: “This is the largest monthly decline in over six years and while the monthly measurement can be erratic it highlights the volatility of the current landscape, with a number of industry sources reporting huge swings in both positive and negative movement from one month to the next.
“This is largely due to the subdued level of activity from both buyers and sellers with even the slightest uplift impacting the top line figures.”
Estate agent James Pendleton founder and director Lucy Pendleton says: “With just four months left of 2018, the biggest monthly fall since the London Olympics brings prices dramatically in line with the lender’s forecast for the year. Nationwide’s prediction of a 1% increase in 2018 would mean prices finish on just over £213,000, a level not seen since April and only around £1,500 lower than current prices.”
Yopa chief property analyst Mike Scott adds: “Prices are up by 1.7 per cent for the year to date even with this month’s fall, so [the market] would need a more sustained autumn downturn to hit 1 per cent, and the final figure for the year will probably be closer to 2 per cent.”
Housesimple.com chief executive Sam Mitchell, meanwhile, points out discrepancies in regional activity: “These figures would suggest that the UK housing market has caught a cold in August, but nothing could be further from the truth. While London prices continue to soften, the outlook in the north of the country, particularly the North West, is far more positive.
“Walk into an estate agent in Liverpool or Manchester and they will tell you something entirely different from an agent in the capital. Properties are flying out the door, many at near asking price and there’s a real appetite to buy.”
Help to buy on the up
The report also reveals that there were approximately 48,000 help-to-buy completions in England in the 12 months to March, an increase of 21 per cent annually. This equals 8 per cent of total house purchase mortgages in England.
“It is unclear how much HTB activity represents additional demand and how much has simply replaced activity that would already have taken place,” says Gardner.
“The scheme has, however, been a key source of demand for newly built homes in recent years. Indeed, HTB has accounted for more than a third (37 per cent in the last 12 months) of new build completions in England. This is even higher in some regions, such as the North West, where HTB accounted for nearly half of new build purchases,” he adds.