House prices up 3.5pc in a year
Nationwide chief economist Robert Gardner said he believed the rise in house prices was beginning to stabilise.
He added: “The outlook on the demand side remains encouraging. Employment growth has remained relatively robust in recent quarters, and, after a prolonged period of subdued growth, wage growth is also edging up.
“With consumer confidence buoyant and mortgage rates still close to all-time lows, demand for housing is likely to firm up in the quarters ahead.
“It remains unclear whether activity on the supply side will catch up with demand.
“The number of new homes under construction has started to pick up, albeit from historically low levels, and further increases are required if a sustainable recovery in the housing market is to be maintained over the longer term.”
Ben Thompson, managing director of estateagent4me, said while some may argue that this latest rise is a reflection of the growing economy, the government still had to address supply.
He said: “Until the government takes steps to reduce the vast gulf between supply and demand with a more sustained building programme, homeowners will need to use all of the resources available to ensure that their money is going as far as possible when buying or selling a home.
“Our research has revealed vast differences in what sellers can expect with different estate agents, not only in terms of how quickly these deals can be completed, but also the sale price agreed.”
Capital Economics property economist Matthew Pointon said prices would continue to climb over the remainder of the year driven by continued demand and the lack of supply.
He said: “Demand has been supported by an increase in mortgage lending, with last week’s Bank of England data showing mortgage approvals for house purchase rebounding after a weak May. (
“Furthermore, while the latest employment figures were softer than expected, economic growth is increasingly being driven by rising wages – a factor that has supported the ability of buyers to bid up prices.
“In addition to healthy demand, active supply also remains constrained, with the RICS survey showing stocks at record lows and new sales instructions falling.
“Consequently, we expect that increased competition between buyers will allow annual house price inflation to pick up to 6% by the end of the year. But in the longer term, there are reasons to believe that house price inflation will slow.”
Pointon said these were likely to include rising mortgage rates and tight affordability.