Stay informed with free updates
Simply sign up to the UK house prices myFT Digest — delivered directly to your inbox.
UK house prices returned to growth in July as the property market stabilised following the end of a stamp duty holiday, the lender Nationwide said on Friday.
House prices rose 0.6 per cent on the previous month, slightly ahead of the 0.5 per cent increase analysts had expected, Nationwide’s monthly index showed. The annual rate was 2.4 per cent, up from 2.1 per cent in June.
The recovery follows a sharp monthly price fall in June, when the market was becalmed following the expiry of a tax break earlier in the year. It brought the average price of a house to £272,664, still short of the £273,427 it had reached in May.
Robert Gardner, Nationwide’s chief economist, said activity was “holding up well” and likely to strengthen gradually provided the economy remained on track — helped by strong wage growth, subdued price growth and greater availability of high loan to value mortgages.
“While the price of a typical UK home is around 5.75 times average income, this ratio is . . . currently the lowest it has been for over a decade,” he said.
Bank of England data released earlier this week also pointed to a housing market recovery, showing that both the number of mortgage approvals and the value of new mortgage lending rose in June following an earlier lull.
The BoE also said the interest rate paid on new mortgages had fallen for a fourth consecutive month in June, to 4.34 per cent.
Elliott Jordan-Doak, at Pantheon Macroeconomics, said Nationwide’s figures, while often volatile from month to month, were “another indication that the market is gradually recovering”, in line with recent surveys of estate agents reporting a rise in new buyers.
Ashley Webb, at the consultancy Capital Economics, said a weak jobs market would “probably prevent the recovery from continuing at this pace” but that house prices would gain “renewed impetus” next year if the BoE continued cutting interest rates.
