UK house prices rise 0.8% in August

UK house prices returned to stronger growth in August, with an influential index recording a better-than-expected 0.8 per cent month-on-month rise in the average price of a home, reports FTAdviser sister title FastFT.

The Nationwide house price index recorded its 16th month-on-month rise, with the figure much better than the 0.1 per cent growth expected by economists polled by Reuters and the revised 0.2 per cent recorded in July.

The annual house price rise was 11 per cent, up from 10.6 per cent in July and expectations of 10.1 per cent.

The average price of a home in the UK is now £189,306 from £188,949 in July.

Robert Gardner, Nationwide’s chief economist, commented: “While this is still below the 11.8 per cent recorded in June, house price growth continues to outpace earnings by a wide margin, with average wage growth running at less than 1 per cent in recent months.

“Nevertheless, at a national level housing affordability does not appear stretched by historic standards, in part due to the low level of mortgage rates. The cost of servicing a typical mortgage remains close to the long run average as a share of take home pay.”