Political and economic uncertainty led to subdued house price growth in June, according to the latest House Price Index by Nationwide. This trend of slower growth mirrored developments in the broader economy, the index claimed.
Price growth for the average UK home slowed to just 0.5 per cent in June as compared to the same month last year. Nationwide added that house prices rose 0.1 per cent on a monthly basis between May and June, reflecting the trend of a slowdown.
As a result, the average home was estimated to be worth £216,515 in June, according to Nationwide. During the same period last year, annual price growth had been 2 per cent.
London and South East decline
Prices in London and the South East showed the weakest performance, according to Nationwide. Prices in the capital declined by 0.7 per cent, with a quarter-on-quarter contraction of 3.8 per cent. In the Outer South East region, prices dropped by 1.6 per cent on an annual basis.
In contrast, over in Northern Ireland, prices grew by 5 per cent since last June, with quarterly price growth of 3.3 per cent in just one quarter alone.
Despite this, prices in Northern Ireland were some of the cheapest of any UK region, with the average Northern Irish home estimated to be worth £143,343 in June.
Despite declining average prices, London homes remained some of the most expensive in the whole of the UK. Nationwide estimated the average London home to be worth £465,722 in June.
Weakness despite strong fundamentals
Much of the weakness in sentiment in the UK housing market was likely to stem from uncertainty, according to Nationwide.
Robert Gardner, chief economist at Nationwide, explained: “While healthy labour market conditions and low borrowing costs will provide underlying support, uncertainty is likely to continue to act as a drag on sentiment and activity.”
However, despite weak price growth, Mr Gardner added that this did not spill over into mortgages. He added: “Nevertheless, indicators of housing market activity, such as the number of mortgages approved for house purchase, have remained broadly stable.”
Nationwide also presented data which suggested that wages were keeping up with house price growth. As a result, the average UK home was worth almost six times the average salary in June, having remained virtually stable for the last four years.