UK House prices hit record high amid market slow down

House price growth has slowed this month but remains in double figures, with the average house price in the United Kingdom now standing at £271,613, according to the latest house price index from Nationwide.

The building society said the average price of a home in the capital rose at an annual rate of six per cent in the second quarter of the year to stand at a record £540,399. Nationally prices are rising at 10.7 per cent, compared to 11.2 per cent in May. London was the slowest growing region.

Nationwide's chief economist Robert Gardner said, “There are tentative signs of a slowdown, with the number of mortgages approved for house purchases falling back towards pre-pandemic levels in April and surveyors reporting some softening in new buyer enquiries.

“Nevertheless, the housing market has retained a surprising amount of momentum given the mounting pressure on household budgets from high inflation, which has already driven consumer confidence to a record low.

Source: Nationwide. The trends in the UK may reflect a shift in housing preferences

“Part of the resilience is likely to reflect the current strength of the labour market, where the number of job vacancies has exceeded the number of unemployed people in recent months. Furthermore, the unemployment rate remains close to 50-year lows. At the same time, the stock of homes on the market has remained low, which has helped to keep upward pressure on house prices.

London remained the weakest performing UK region, with annual price growth slowing to 6.0%, from 7.4% in the previous quarter. “Looking at house price growth since the onset of the pandemic, we see a similar pattern, with London also the weakest performing region” Gardner noted. “Since 2020 Q1, average house prices in the capital have increased by 14.9%, whilst all other regions, except the Outer Metropolitan, have seen at least a 20% uplift.

According to reports, industry pundits believe the market is undoubtedly going to moderate as disposable incomes are squeezed and homebuyers become even more circumspect about making large outlays. Yet with unemployment low, banks reliant on mortgage business, and politicians aware property investment remains a British obsession, prices are unlikely to take a tumble.

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