9:29 AM, 29th June 2021, About 11 months ago
The June Nationwide House price index is indicating year-on-year house price growth of 13.4%, the highest level of house price inflation since November 2004.
Monthly inflation is 0.7% showing a slight easing from May’s figure of 1.7% and the average price of a house in the UK now stands at £245,432.
Nationwide’s Chief Economist, Robert Gardner, said: “Annual house price growth accelerated to 13.4% in June, the highest outturn since November 2004. While the strength is partly due to base effects, with June last year unusually weak due to the first lockdown, the market continues to show significant momentum. Indeed, June saw the third consecutive month-on-month rise(0.7%), after taking account of seasonal effects. Prices in June were almost 5% higher than in March.
“Regional data for the three months to June indicates that all parts of the UK saw an acceleration in annual house price growth. Northern Ireland and Wales saw the largest gains, at 14% and 13.4% respectively in Q2. By contrast, Scotland saw the weakest rate of annual growth, at 7.1% closely followed by London at 7.3%.”
Outlook clouded beyond the near term
“Underlying demand is likely to remain solid in the near term as the economy unlocks. Consumer confidence has rebounded while borrowing costs remain low. This, combined with a lack of supply on the market, suggests further upward pressure on prices. But as we look toward the end of the year, the outlook is harder to foresee.
“Activity will almost inevitably soften for a period after the stamp duty holiday expires at the end of September, given the strong incentive for people to bring forward their purchases to avoid the additional tax. Nevertheless, underlying demand is likely to soften around the turn of the year if unemployment rises as most analysts expect, as government support schemes wind down. But even this is far from assured. Even if the labour market does weaken, there is also scope for shifts in housing preferences as a result of the pandemic to continue to support activity for some time yet.”
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