United Kingdom: Housing market rebounds slightly in July
July 31, 2018
According to the Nationwide Building Society (NBS), house prices in the United Kingdom rose 0.6% in July compared to the previous month in seasonally adjusted terms, down from June’s revised 0.7% increase (previously reported: +0.5% month-on-month). On an annual basis, house prices rose 2.5% in July, up from June’s 2.0% increase, which had marked a five-year low. The average house price in July was GBP 217,010 (July 2017: GBP 211,671).
Going forwards, house prices are likely to continue to increase at a mild rate, underpinned by tight supply. In addition, a gradual recovery in real wages should support demand. However, pessimistic consumer sentiment will likely weigh on the market. Monetary conditions will be another key determinant of the evolution of prices. With the Bank of England raising rates at its August meeting, this will have a slight knock-on effect on borrowing costs going forward for those with variable mortgages.
Author: Oliver Reynolds, Economist