Thursday, August 4 2022

A buoyant labor market and limited housing stock helped sustain double-digit annual house price growth in the UK in July, despite rising interest rates, high inflation and weaker affordability.

UK house prices rose at an annual rate of 11% last month, up slightly from 10.7% in June, according to mortgage provider Nationwide.

The increase took the average house price to £271,209, £55,000 above the February 2020 level, before the Covid-19 pandemic.

“Demand continues to be supported by strong labor market conditions,” said Robert Gardner, Nationwide’s chief economist. “At the same time, the limited stock of homes on the market has helped keep the upward pressure on house prices.”

However, the impact of inflation at a 40-year high of 9.4% and consumer confidence at an all-time high was evidenced by a cooling in Nationwide-managed mortgage deals.

Total housing market transactions in the three months to May were about 20% below high levels resulting from the stamp duty suspension, Nationwide reported. Yet they were still 5% above pre-pandemic levels.

Mortgage moving transactions slowed more than other sectors, while mortgage completions for first-time buyers remained resilient.

This is despite the fact that house price growth continues to significantly outpace earnings, which increases the required deposit. Combined with higher interest rates, these factors have pushed up mortgage payments relative to income.

Previous

Global edge data center market expected to grow at a rate of 26% through 2026

Next

Keller boss hails record financial performance

Check Also