UK house prices rise modestly in July, affordability improves, Nationwide says
House prices in July rose by 0.6% on a seasonally adjusted basis, taking the average to 272,664 pounds ($360,080), after a 0.9% drop in June, raising the annual rate of growth to 2.4% from 2.1%, the figures from Nationwide Building Society showed.
Economists polled by Reuters had forecast a 0.3% monthly rise and a 2.1% annual increase for July.
China property investment falls 10.7% yr/yr in January-May
Annual price rises are down from a peak of 4.7% in December and Nationwide said demand had stabilised after the end in April of an exemption from stamp duty land tax on many lower-value house purchases.
House prices are now rising more slowly than consumer price inflation or wages and the cost of an average house has fallen to around 5.75 times average income from a record high of 6.9 in 2022.
'After deteriorating markedly in the wake of the pandemic, housing affordability has been steadily improving thanks to a period of strong income growth alongside more subdued house price growth and a modest fallback in mortgage rates,' Nationwide Chief Economist Robert Gardner said.
The Bank of England is widely expected to cut its main interest rate to 4% from 4.25% on August 7 but economists are unsure how many further rate cuts are likely as inflation has picked up to close to double the BoE's 2% target.
Nationwide said the interest rate on a typical five-year fixed-rate mortgage with a 25% deposit had fallen to 4.3% from a peak of around 5.7% in late 2023.
Last month the BoE relaxed restrictions on high loan-to-income mortgages.
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