UK house prices fell by 0.2 per cent in June, the latest Nationwide house price index has revealed.
The lender reported today (2 June) that annual house price growth moderated to 3.3 per cent in June, from 4.6 per cent in May.
Robert Gardner, chief economist at Nationwide, said the annual pace of house price growth maintained the gradual downward trend that has been in evidence since mid-2014, though June marked the smallest annual rate of increase for two years.
“House price growth continues to outpace earnings, but the gap is closing, helped by a pickup in annual wage growth, which moved up to 2.7 per cent in the three months to April from 1.9 per cent at the start of the year.
“The slowdown in house price growth is not confined to, nor does it appear to be driven primarily by, developments in London,” he added, pointing out that in quarter on quarter terms, London has continued to see price growth at or above the rate in the UK overall over the past three quarters.
Alex Gosling, chief executive of online estate agents HouseSimple.com, said June saw only the second monthly fall in house prices this year suggesting any momentum gathered following the general election has started to ease.
However, he added there was no immediate cause for concern that the housing market is starting to stutter. “Typically, the summer months are often slower months for property purchases as buyers head to the beaches rather than view properties.
“What we’re seeing overall is a return to normality, although a black cloud does loom overhead in the form of a shortage of stock.
Jonathan Samuels, chief executive of Dragonfly Property Finance, said the property market is a veritable conundrum right now. “The June dip and ongoing slowdown in the rate of annual growth have come despite the fact that demand is picking up and supply is still constrained.
“While the gap between earnings and house price growth may be narrowing, you suspect there will always be a degree of repulsion between the two, like two positive magnets.”
He concluded that while London prices may have softened quite considerably, they are still comfortably above the UK regional average. “Even when London falls, the landing is relatively soft.”
emma.hughes@ft.com
