Monthly house prices surprisingly grew by 1.1% in June given the uncertainty before and after the General Election, Nationwide’s House Price Index has found.
This growth brings annual inflation to 3.1%, up from 2.1% in the year to May, and comes after monthly prices dropped by -0.2% last month.
Robert Gardner, Nationwide’s chief economist, said: “In effect, after two sluggish months, annual price growth has returned to the 3-6% range that had been prevailing since early 2015.
“There has been a shift in regional house price trends. Price growth in the South of England has moderated, converging with the rates prevailing in the rest of the country.
“In Q2 the gap between the strongest performing region (East Anglia, which saw 5% annual growth) and the weakest (the North, with 1% growth) was the smallest on record, based on data going back to 1974. Nevertheless, when viewed in levels, the price gap between regions remains extremely wide.
“London saw a particularly marked slowdown, with annual price growth moderating to just 1.2% – the second slowest pace of the 13 UK regions and the weakest pace of growth in the capital since 2012.”
Mark Harris, chief executive of mortgage broker SPF Private Clients, said: “Buyers are looking outside the capital either for investment properties or to live and commute from.
“A city such as Birmingham is just over an hour away, for example – with people prepared to commute for that long if it means a more affordable property.”
Industry commentators are generally surprised that house price growth jumped up this month.
Lucy Pendleton, founder director of independent estate agents James Pendleton, said: “The housing market has come up for air, which is incredible in a month that saw one of the least conclusive general elections ever.
“If Theresa May’s disastrous election gamble was the first shock result, then the performance put in by the housing market in London has to be the second.”
And Jeremy Leaf, north London estate agent and a former RICS residential chairman, said: “These figures are a little surprising when you consider some of the mixed messages that we have been receiving from the housing market over the past few months.
“But they do demonstrate that activity is happening where buyers and sellers are prepared to be realistic and take advantage of the low mortgage rates available.”