United Kingdom: House prices increase in July
July 30, 2015
In July, home prices in the U.K. rose 0.4% over the previous month, which contrasted the 0.2% decrease observed in June, according to the Nationwide Building Society (NBS). July’s figure marked the fastest monthly increase on record. On an annual basis, home prices rose 3.5% (June: +3.3% year-on-year). The average house price was GBP 195,621 (June 2015: GBP 195,055).
According to the NBS, “after moderating over the past twelve months, there are tentative signs that annual house price growth may be stabilising close to the pace of earnings growth, which has historically been around 4%.” On the demand side, the NBS commented that the outlook remains positive. Following a prolonged period of subdued growth, wage growth is edging up. Looking ahead, demand will likely be supported by buoyant consumer confidence and all-time lows in mortgage rates.
According to the Q2 2015 quarterly release, NBS data showed that, geographically speaking, the strongest increases in prices are in the city of London, where the average house price rose 12.7% year-on-year. This is markedly higher than the 5.9% rise that has been recorded in the U.K. as a whole. The regions other than London that saw higher-than-average price increases were: Outer Metropolitan, Outer South East and East Anglia.
Author: Dirina Mançellari, Senior Economist