Annual house price growth in the UK slowed in July in response to growing economic uncertainty, says Nationwide.
Nationwide’s latest House Price Index showed annual house price growth slowed to 1.8% in July from 2.2% in June.
House prices remained broadly flat month-on-month, up just 0.1%. The average property price in the UK was £277,542 in July, marginally higher than the £277,484 recorded in June.
Robert Gardner, chief economist at Nationwide, said: “Market activity and house prices have remained soft in recent months, in part reflecting the uncertain economic backdrop. Geopolitical tensions remain high, with the conflict between Iran and the US again exerting upward pressure on energy prices and market interest rates in recent weeks.
“Financial market expectations for the future path of Bank Rate have been volatile, reflecting shifting views about the inflationary implications of events at home and abroad.”
Ian Futcher, financial planner at Quilter, said affordability continues to be a significant challenge, particularly as mortgage rates have drifted higher in recent weeks amid renewed tensions in the Middle East.
Futcher said: “The Bank of England monetary policy committee’s decision to hold rates will provide some reassurance to borrowers. There had been growing concern that the renewed pressure on oil prices could complicate the inflation outlook and prompt a more hawkish response from policymakers.
“However, while a hold offers a degree of stability, we’re unlikely to see a meaningful reduction in mortgage costs for a while yet. Given concerns around inflationary pressures and the uncertain economic backdrop, lenders will remain cautious in their pricing.
“For now, the housing market remains in a holding pattern. Any meaningful shift in house prices will depend on how inflation, interest rates and consumer confidence evolve over the coming months, alongside whether mortgage affordability begins to improve.”
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