House price growth slows despite low stock
The slowdown in house price growth was less than market analysts’ forecasts of 3.1%.
UK house prices rose by 0.3% on a monthly basis, which was in line with market analysts’ expectations.
Additionally Nationwide revealed surveyors reported that July saw the lowest ever number of properties on their books since records began in 1979.
Robert Gardner, Nationwide’s chief economist, said: “This month’s data provides further evidence that annual house price growth may be stabilising close to the pace of earnings growth, which has historically been around 4%.
“However, survey evidence cautions that this trend may not be maintained unless construction activity accelerates. Surveyors reported the lowest ever number of properties on their books in July on data extending back to the late 1970s – whilst new buyer enquiries picked up.
“However, with UK house building running well below the expected rate of household formation in recent years and with demand for homes rising, a significant increase in construction activity is required if affordability is not to become stretched in the years ahead.”
HouseSimple research also published this morning supports this with new property listings on Rightmove falling 13% in July.
London saw new property listings fall 15% while new property listings in Glasgow and Edinburgh fell 30.3% and 29.7% respectively .
Alex Gosling, chief executive of HouseSimple, said: “Any hope that sellers were finally returning to the market seems to have been a vain one for the time being. A boost to new stock levels in June suggested that we were finally starting to see some movement from sellers, but that momentum seems to have been short-lived.
“Why homeowners are not moving is the $64,000 question. Is it because they can’t afford to as property prices have risen out of reach of them?
“Or maybe they’re not confident about market conditions, despite the strength of the economy and the highly competitive mortgage rates on offer at the moment?”
Rob Weaver, director of property at residential investment platform Property Partner, said: “A softening in the market with the slowest growth in two years is very possibly a result of the super buoyant prices we had one to two years ago.
“But with a combination of an historic lack of properties coming onto the market and continued shortage in the supply of new homes, house prices can really only go one way in the medium to long term: up.”