Property prices rise in August
House prices increased by 0.6% in August to reach an average £206,145, according to Nationwide Building Society.
The mutual said that this represented annual house price growth of 5.6%, up from 5.2% in July.
Robert Gardner, Nationwide’s chief economist, said: “The pick up in price growth is somewhat at odds with signs that housing market activity has slowed in recent months. New buyer enquiries have softened as a result of the introduction of additional stamp duty on second homes in April and the uncertainty surrounding the EU referendum. The number of mortgages approved for house purchase fell to an eighteen-month low in July.
“However, the decline in demand appears to have been matched by weakness on the supply side of the market. Surveyors report that instructions to sell have also declined and the stock of properties on the market remains close to thirty-year lows. This helps to explain why the pace of house price growth has remained broadly stable.”
Ian Thomas, co-Founder and director at online mortgage lender LendInvest, said Government intervention is necessary to get more homes built. He noted: “That house prices went up last month, despite the post-Brexit uncertainty, is a reflection of the sharp imbalance between supply and demand of property in the UK. The House of Lords Select Committee on Economic Affairs suggested we need to build 300,000 homes a year to have a moderating effect on house prices, but last week’s housebuilding figures from the Department for Communities and Local Government show we are nowhere near that.
“The Government must grasp this issue by the horns and do more to encourage homebuilding. It is clear that hoping that the biggest housebuilders will be able to build us out of this crisis is just wishful thinking and grass roots changes are needed.”