News: UK house prices slip £100 in June, say Nationwide

Fri, 03 Jul 15

UK house prices have slipped by around just £100 in June, according to Nationwide.

The lender’s latest house price index shows that house prices fell 0.2 per cent in June 2015 from May 2015, reversing the 0.2 per cent growth recorded in May.

The average house price is now £195,055, down £111 from £195,166 in May. On a yearly basis, prices are 3.3 per cent higher than in June 2014, lower than the 4.6 per cent annual growth recorded in May.

Nationwide’s Chief Economist, Robert Gardner, says that the figures maintain a downward trend that has been evident since the middle of last year, as house prices continue to outpace earnings.

"The gap is closing," comments Gardner, "helped by a pick-up in annual wage growth, which moved up to 2.7 per cent in the three months to April from 1.9 per cent at the start of the year.

"The slowdown in house price growth is not confined to, nor does it appear to be driven primarily by, developments in London. In quarter on quarter terms, London has continued to see price growth at or above the rate in the UK overall over the past three quarters, while the annual rate of price growth in the capital remains the second highest in the country."

11 of the 13 UK regions saw a slowdown in the annual rate of growth in Q2. Most parts of the country continued to see annual house price gains - the exceptions were Wales and Scotland, which recorded small declines.

Nationwide also warns that housing stock is likely to be used more intensively
unless supply picks up.

"Given the gap between population growth and rates of housebuilding (which has been evident for some time) the housing stock is likely to be used increasingly intensively until building activity catches up. There are signs that this has been occurring, with the number of vacant properties trending down since 2008, though council tax changes in 2013 impacted reporting and probably overstate the decline in the last two years," adds Gardner.
This relationship between supply and vacancies is notable at a regional leve.

"As you might expect, regions where affordability is more stretched see far fewer vacancies," continues Gardner. "For example, in London, the UK region where affordability is most stretched, only 1.7 per cent of the housing stock was vacant in 2014, around half the 3.5% rate prevailing in the North of England."

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