UK house prices fall for first time since April, mortgage lender Nationwide says
In annual terms, prices are 2.4% higher than in August last year, which marks the fastest increase since December 2022
BRITISH house prices unexpectedly fell in August in their first monthly drop since April, even as the outlook for the property market is likely to strengthen, major mortgage lender Nationwide Building Society said on Friday (Aug 30).
The lender noted that house prices slipped by 0.2 per cent on the month. This comes after economists polled by Reuters had forecast prices would rise by 0.2 per cent from July.
In annual terms, prices were 2.4 per cent higher than in August last year. This marks the fastest increase since December 2022, but a smaller gain than the median forecast of 2.9 per cent in the poll.
Nationwide chief economist Robert Gardner said the housing market remained subdued, but was coping with the increase in interest rates.
“Providing the economy continues to recover steadily, as we expect, housing market activity is likely to strengthen gradually as affordability constraints ease,” Gardner said.
The Bank of England (BOE) cut interest rates on Aug 1 to 5 per cent, from a 16-year high of 5.25 per cent.
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Investors are assigning a roughly one-in-four chance of the BOE lowering the bank rate by another quarter point in September. Additionally, they are fully pricing a rate cut at the central bank’s November meeting.
There have been signs of new momentum in the housing market in recent months.
A survey published by Lloyds Bank on Friday showed confidence in the construction sector – which includes builders of infrastructure and commercial property, and residential developers – jumped 14 points in August to 58 per cent.
The Royal Institution of Chartered Surveyors said earlier this month its measure of expected sales over the next three months was the strongest since January 2020, immediately before the coronavirus pandemic struck Britain.
However, the shortage of properties on the market is likely to remain a factor supporting house prices for the medium term.
Britain’s new government has promised to speed up homebuilding. It announced on Thursday that it created a group of experts to speed up the construction of housing schemes, which have been delayed by planning and red tape. REUTERS
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