House prices pick up ...slightly

Nationwide's scores for August are in  ....

Nationwide's Chief Economist, Robert Gardner, gives his spin on the property market:

“UK house prices increased by 0.6% in August, resulting in a slight pick up in the annual rate of house price growth to 5.6%, from 5.2% in July, although this remains within the 3- 6% range prevailing since early 2015.

“The pick up in price growth is somewhat at odds with signs that housing market activity has slowed in recent months. New buyer enquiries have softened as a result of the introduction of additional stamp duty on second homes in April and the uncertainty surrounding the EU referendum. The number of mortgages approved for house purchase fell to an eighteen-month low in July.

“However, the decline in demand appears to have been matched by weakness on the supply side of the market. Surveyors report that instructions to sell have also declined and the stock of properties on the market remains close to thirty-year lows. This helps to explain why the pace of house price growth has remained broadly stable." 

Housing market outlook

“What happens next on the demand side will be determined, to a large extent, by the outlook for the labour market and confidence amongst prospective buyers.

“It is encouraging that the unemployment rate remained at a ten-year low in the three months to June, though labour market trends tend to lag developments in the wider economy. 

It is also positive that retail sales increased at a healthy rate in July, up almost 6% compared to the previous year, even though consumer confidence fell sharply during the month."

However, business surveys suggest that the manufacturing, services and construction sectors all slowed sharply in July, and, if sustained, this is likely to have a negative impact on the labour market and household confidence.

“Most forecasters, including the Bank of England, expect the economy to show little growth over the remainder of the year. Indeed, these concerns prompted the Bank’s Monetary Policy Committee (MPC) to implement a range of stimulus measures at the start of August, which will provide support to economic activity and the housing market."

Read in full - Nationwide's House Price Index for August 2016

UK house price growth sees slight pick-up, Nationwide says https://t.co/K6FmK8FJKq

— BBC Business (@BBCBusiness) August 31, 2016

House price growth defies post-Brexit gloomy forecasts - but will it last? https://t.co/RVmaJXPEB6

— Telegraph Property (@TeleProperty) August 31, 2016

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