Property prices in the UK fell by 0.2% and as a result, brought the annual growth rate to its lowest level for two years, according to new research from the Nationwide.
Nationwide’s report suggests that despite a 3.3% increase from June 2014, house value increases were down from the 4.6% recorded last month. Despite a different survey from the Halifax suggesting that average UK home values had shot through the £200,000 barrier, Nationwide’s data suggests that this price is £195,055.[1]
Prices
Price growth and overall activity in the market have slowed since last summer, following an extremely busy start to 2014. However, Nationwide says that the slowdown in prices has not applied to the capital, where affordability has spiralled out of reach for many would-be buyers.
‘House price growth continues to outpace earnings, but the gap is closing, helped by a pickup in annual wage growth, which moved up to 2.7% in the three months to April from 1.9% at the start of the year,’ said Robert Gardner, Nationwide’s chief economist.[1]
Mr Gardner went on to say state that, ‘the slowdown in house price growth is not confined to, nor does it appear to be driven primarily by, developments in London. In quarter on quarter terms, London has continued to see price growth a or above the rate in the UK overall over the past three quarters.’[1]
Irish smiles
Nationwide’s figures are based on mortgages that the firm has approved during the month and shows that Northern Ireland has overtaken the English capital to record the largest yearly house price growth.
Figures assessing the second quarter of the year show that prices in Northern Ireland have increased by 8% during the last twelve months, in comparison to 7.3% in London. It was not such good news for Wales and Scotland, where prices fell by 0.8% and 1% respectively.[1]
Howard Archer, chief UK economist at IHS Global Insight commented that he was, ‘slightly surprised,’ by the figures but said that the price fall recorded in June, ‘does not fundamentally change our view that house prices are likely to be firmer over the second half of the year amid improving activity.’[1]
‘A current shortage of properties on the market is also likely to provide support to house prices,’ Archer added.[1]
[1] http://www.theguardian.com/money/2015/jul/02/uk-house-prices-slip-in-june-says-nationwide