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Wednesday, June 29, 2016

UK annual property price growth at 5.1%

Nationwide has released its House Price Index for June 2016.

The bank states annual UK house price growth now stands at 5.1%, up from 4.7% in May. 

The average UK property price is now £204,968.

Nationwide's Chief Economist, comments-

“The rate of annual UK house price growth has remained fairly stable over the past twelve months, confined to a fairly narrow range of between 3% and 6% - this trend was maintained in June with price growth at 5.1%, up slightly from the 4.7% recorded in May.

It has become difficult to gauge the underlying pace of demand in recent months, due to the surge in house purchase activity in March ahead of the introduction of Stamp Duty on second homes on 1 April.

It will therefore be difficult to assess how much of the likely fall back in transactions in the quarters ahead is because buyers brought forward purchases to avoid additional Stamp Duty liabilities, and how much is due to increased economic uncertainty following the referendum result. Gauging the likely impact on house prices will be even more difficult.

Ultimately conditions in the housing market will be determined by conditions in the wider economy, especially the labour market. It is too early to assess the impact of the referendum vote on the economy. However, it is encouraging that the labour market had remained robust in recent months, with solid employment growth and the unemployment rate declining to an eleven-year low in April. Borrowing costs also remained close to historic lows.

Moreover, the lack of homes on the market – with estate agents continuing to report a record low number of properties on their books – will also provide underlying support for prices even if demand softens." 

Regional disparities continue to grow

“Regional house price trends also maintained the pattern prevailing in recent quarters, with southern areas of England recording the fastest rates of house price growth in Q2.

It remains the case that the pace of house price growth tends to decline as you move from the south to the north of the country, even though prices in the south are already well above pre-crisis levels, while in Northern Ireland, Scotland, Wales and the North of England prices remain well below their 2007 highs. "
regional house price growth june 2016

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