Annual house price growth in the UK remained below 1 per cent for the eighth month in a row in July, rising just 0.3 per cent to £217,663, according to a recent House Price Index from Nationwide.
Meanwhile, month on month prices also saw a marginal increase of 0.3 per cent.
Mixed signals from property market
Robert Gardner, chief economist at Nationwide, believes that while property price growth has remained fairly stable, there have been mixed signals from the property market in recent months.
Mr Gardner commented: “Surveyors report that new buyer enquiries have increased a little, though key consumer confidence indicators remain subdued. Data on the number of property transactions points to a slowdown in activity, though the number of mortgages approved for house purchase has remained broadly stable.
“Housing market trends will remain heavily dependent on developments in the broader economy. In the near term, healthy labour market conditions and low borrowing costs will provide underlying support, though uncertainty is likely to continue to exert a drag on sentiment and activity.”
Mr Gardner also explained that it is less clear why home mover activity has remained so subdued, but the lack of properties on the market is likely to be a factor. This has led to a less liquid market, which may be deterring some potential home movers from trying to sell their own properties – a trend which becomes self-reinforcing, according to Mr Gardner.
Jeremy Leaf, North London estate agent and former RICS residential chairman, saw the figures in a more positive light. He commented: “The Nationwide figures are always a good indicator of market strength, not least because of their longevity and accuracy.
“These confirm what we are finding on the ground – that the market is very much in limbo on the one hand underpinned by near record-low mortgage rates and improving affordability, but on the other, not moving ahead as we might have expected.”
Mr Leaf added that one of the reasons for the lack of activity is clearly political uncertainty, but there is no doubt that talk of changes to stamp duty is also weighing on perspective sellers’ minds.
Mr Leaf concluded: “Fortunately, first-time buyers are slowly returning, taking advantage of buy-to-let landlord caution following various tax and regulation changes. Looking forward, we don’t expect the situation to change too radically until there is more clarity on the political front, although there is no doubt some buyers are looking beyond Brexit and making the most of more realistic pricing.”