House price growth rebounded in June following a series of falls during the previous three months.
Nationwide’s latest House Price Index reveals prices rose 1.1 per cent in June, erasing the decline recorded over the March to May period.
Meanwhile, annual growth climbed to 3.1 per cent – up from 2.1 per cent during May – pushing the average priced to £211,301.
The news follows a string of data pointing to a slowdown in the sector, with Halifax’s latest HPI showing house prices dropped for the second quarter of a row.
Nationwide's chief economist Robert Gardner cautioned that monthly rates can be volatile, even after accounting for seasonal effects.
“The annual rate of house price growth, which gives a better sense of the underlying trend, continues to point to modest price gains,” he added.
“Annual house price growth edged up to 3.1 per cent from 2.1 per cent in May. In effect, after two sluggish months, annual price growth has returned to the 3-6 per cent range that had been prevailing since early 2015.”
However, he warned that market activity and price growth is likely to be hampered by a further squeeze on household spending as inflation continues to rise.
Nationwide’s index also shows the gap in house price growth between strongest and weakest performing regions in the second quarter was the smallest on record.
East Anglia saw the biggest quarterly gains, with average prices up 5 per cent year-on-year, while the north witnessed the slowest growth of 1.1 per cent.
Jeremy Duncombe, director, Legal & General Mortgage Club, commented: “House prices continue to rise above inflation. Whilst demonstrating the market’s resilience in the face of political uncertainty, this will be sobering news for many first-time buyers who are struggling to make their first step onto the ladder. For a healthier market, what we need to see is property prices rising in line with inflation.
“With Monday’s announcement of a coalition agreement, the newly-formed government must consider solutions to restructure our housing market and introduce measures that bring house price inflation in line with earnings.
“More affordable housing needs to be built to allow all those who wish to do so, a better chance of achieving homeownership. More than that, however, we also need to see incentives for home movers and last time buyers looking to downsize, so that we can get our housing market on the move.”