United Kingdom: House prices tick up marginally in July
July 31, 2017
According to the Nationwide Building Society (NBS), house prices in the United Kingdom rose 0.3% in July compared to the previous month in seasonally adjusted terms (June: +1.1% mom), marking the secondly consecutive monthly price rise following a sag in prices in the spring. On an annual basis, house prices rose 2.9% in July, down marginally from 3.1% in June. The average house price in July was GBP 211,671 (July 2016: GBP 205,715).
The uptick in house prices comes despite signs of softness in the property market, with the number of housing transactions dipping to the lowest level in eight months in June, while in the same month the number of mortgages approved fell to a nine-month low. However, a familiar face in the form of feeble supply continues to put a floor under prices; the number of homes on estate agents’ books is nearly a thirty-year low, and few new properties are coming onto the market.
Looking ahead, the housing market will not prove immune to developments in the wider economy. With household purchasing power likely to continue to come under pressure due to higher inflation and subdued nominal wage growth, demand for housing should remain moderate. At the same time, the longstanding problem of a lack of supply is unlikely to disappear any time soon, which should prop up prices, leading to a mild price rise for 2017 as a whole.
Author: Oliver Reynolds, Economist