Amid rising energy bills and higher interest rates squeezing UK household budgets, house price inflation softened in August, data published by Nationwide Building Society showed Thursday.
House price inflation slowed to 10.0 percent in August from 11.0 percent in July. Nonetheless, the rate remained in double-digits for the tenth month in a row. The rate was forecast to ease more sharply to 8.9 percent.
In the past two years, the average house price has increased by almost GBP 50,000.
On a monthly basis, house prices gained 0.8 percent, following a 0.2 percent rise in the previous month. Prices were forecast to edge up 0.1 percent.
Nationwide’s Chief Economist Robert Gardner noted signs of losing momentum in the property market with surveyors reporting fewer new buyer enquiries in recent months and the number of mortgage approvals for house purchases falling below pre-pandemic levels.
Still the slowdown to date has been moderate and combined with a shortage of stock on the market, price growth remained firm.
Gardner expects the market to slow further as pressure on household budgets intensifies in the coming quarters, with inflation set remain in double digits into next year.
Moreover, the Bank of England is widely expected to continue raising interest rates, which will also exert a cooling impact on the market if this feeds through to mortgage rates, which have already increased noticeably in recent months, Gardner said.
In addition to addressing the rising cost of energy bills, improving the energy efficiency of the housing stock could also play a crucial role, he added.
Source: Read Full Article