House price growth slows to 10.6pc
Previously in June prices increased by 11.8% annually, as the market appears to be slowing down, with average prices remaining steady at £188,949.
Robert Gardner, Nationwide chief economist, said: “The slowdown was not entirely unexpected, given mounting evidence of moderation in activity in recent months.
“At least part of the slowdown in activity relates to the introduction of Mortgage Market Review measures.
“The modest rebound in mortgage approvals in June adds weight to the notion that the slowdown will prove temporary, through the underlying pace of demand remains unclear.
“With the labour market strengthening, mortgage rates expected to remain low and consumer confidence rising, activity is likely to recover in the months ahead.”
Paul Smith, chief executive officer of haart, was encouraged by the slowdown.
He said: “House prices are not falling off a cliff, these latest figures show they are currently having a welcomed ‘pit-stop’ – which is necessary for long-term, sustained growth.
“Annual growth figures are always a far more reliable indicator of long-term trends.
“Some areas of the capital are undergoing a price correction whereby people are not willing to pay the prices as they stand, but the laws of supply and demand are still in place and we are seeing steady house price growth in the country as a whole.”
Jeremy Duncombe, director of Legal and General Mortgage Club, said it is a good thing for the market to be corrected sustainably.
He added: “Whilst the market is starting to cool off, the picture is still very regional and so all efforts should be towards ensuring that the recovery is sustainable and consistent.
“At the moment, demand still outstrips supply, particularly in areas such as London and the South East, and this issue urgently needs to be addressed with the building of more homes.”
Hugo Thistlethwayte, managing director of buying agency Prime Purchase, agreed with Duncombe that the market is regionally focused, identifying Oxford and Cambridge as boom sectors.
He said: “Cambridge and Oxford are booming and there are no signs of the property markets slowing there.
“In areas such as West London, the housing market may be more muted than it has been but we are still seeing price rises on top of price rises.
“The market is as near equilibrium now as it can be. A gently rising housing market is a very positive place.”
With consumer confidence increasing Duncombe added that an interest rate rise is just round the corner.
He said: “It is likely that we’ll see a rise in interest rates over the next six to 12 months.
“Our latest Mortgage Mood survey shows that 68% of homeowners believe that rates will rise within a year, so borrowers need to prepare themselves for a rise and anticipate the effect this might have on their mortgage repayments.”
But Thistlethwayte stated that borrowers are sufficiently prepared due to a tightening of mortgage rules.
He added: “Interest rates are still low; they may go higher but we are likely to stay in a low interest rate environment.
“However, there is a check on the market in the form of the new mortgage rules, with the stress testing that will now go on to ensure borrowers can afford them even when rates rise.”