United Kingdom: Housing market momentum ebbs in July
According to the Nationwide Building Society, house prices in the United Kingdom fell 0.5% month-on-month in July, following June’s 0.7% growth. On an annual basis, house prices were up 10.5%, down from June’s 13.4% increase, which had marked the fastest growth since 2004. July’s deceleration likely reflected the phasing-out of the stamp duty holiday from end-June, which caused a front-loading of home purchases in H1.
On the outlook, Robert Gardner, chief economist at Nationwide, commented:
“Underlying demand is likely to remain solid in the near term. Consumer confidence has rebounded in recent months while borrowing costs remain low. […] 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 incentive for people to bring forward their purchases to avoid the additional tax [and] underlying demand is likely to soften around the turn of the year if unemployment rises […] as government support schemes wind down.”