Annual house price growth slowed slightly last month, dipping to 10.7 in June from 11.2 per cent in May, according to the Nationwide.
The slowdown in growth was seen across most regions during the second quarter of the year, which ended yesterday, and also saw the South West overtake Wales as the strongest performing region, while London remained the weakest.
Nationwide chief economist Robert Gardner says: “Prices rose by 0.3 per cent month-on-month, after taking into account of seasonal effects, the 11th consecutive monthly increase. There are tentative signs of a slowdown, with the number of mortgages approved for house purchases falling back towards pre-pandemic levels in April and surveyors reporting some softening in new buyer enquiries.
“Nevertheless, the housing market has retained a surprising amount of momentum given the mounting pressure on household budgets from high inflation, which has already driven consumer confidence to a record low.
“Part of the resilience is likely to reflect the current strength of the labour market, where the number of job vacancies has exceeded the number of unemployed people in recent months. Furthermore, the unemployment rate remains close to 50-year lows. At the same time, the stock of homes on the market has remained low, which has helped to keep upward pressure on house prices.
“The market is expected to slow further as pressure on household finances intensifies in the coming quarters, with inflation expected to reach double digits towards the end of the year. Moreover, the Bank of England is widely expected to raise interest rates further, which will also exert a cooling impact on the market if this feeds through to mortgage rates.”
The Nationwide’s regional house price indices saw the South West overtake Wales as the strongest performing region in Q2, with house prices up 14.7 per cent year-on-year, a slight increase from the previous quarter. This was closely followed by East Anglia, where growth was 14.2 per cent.
Wales - the previous strongest region - slowed its annual price growth to 13.4 per cent. Scotland is up 9.5 per cent year-on-year.
London remains the weakest performing UK region, with annual price growth slowing to 6.0 from 7.4 per cent in Q1 2022.
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