Latest Nationwide House Price Index – The industry reacts
Annual house price growth in the UK slowed in July to 10.5 per cent, according to the latest Nationwide House Price Index.
According to the index, released this week, showed that while the price of homes were still rising at a tremendous rate, growth between July 2020 and July 2021 was 10.5 per cent, down from 13.4 per cent between June 2020 and June 2021.
Robert Gardner, chief economist for Nationwide, said:
“Annual house price growth slowed to 10.5 per cent in July, from the 17-year high of 13.4 per cent recorded the previous month. In month-on-month terms, house prices fell by 0.5 per cent, after taking account of seasonal effects, following a 0.7 per cent rise in June. The modest fallback in July was unsurprising given the significant gains recorded in recent months. Indeed, house prices increased by an average of 1.6 per cent a month over the April to June period – more than six times the average monthly gain recorded in the five years before the pandemic.”
“The tapering of stamp duty relief in England is also likely to have taken some of the heat out of the market. The nil rate band threshold decreased from £500,000 to £250,000 at the end of June (it will revert to £125,000 at the end of September. This provided a strong incentive to complete house purchases before the end of June, especially for higher priced properties. For those purchasing a property above £250,000, the maximum stamp duty saving reduced from £15,000 to £2,500 after the end of June.”
As always, there was much comment within the industry.
Guy Gittins, CEO of Chestertons, said the market had finally reached it peak following the Stamp Duty Holiday, adding:
“With the easing of lockdown restrictions, buyers remain eager to take control of their lives again and a big part of this is to find a property and location to call home. We predict that the introduction of attractive mortgage packages we have seen earlier this year will continue to boost the market, particularly since the Intermediary Mortgage Lenders Association has projected this year’s gross mortgage lending to reach £285 billion.”
Others were more critical.
Sundeep Patel, director of sales at Together, said:
“Latest house prices from Nationwide report a slight drop of 0.5 per cent after a 0.7 per cent rise the month before. Annual house prices also saw a decline to 10.5 per cent in July, from the 13.4 per cent recorded in June. Despite house price growth slightly cooling off, we’re still seeing double digits. Indeed, while the stamp duty holiday and cheap mortgage deals boosted prices, the growing shortage of available stock, and the fact that property continues to be sold for more than the asking price, threatens the opportunity for those not already on the ladder to find something affordable this year. There is a concern that first time buyers may struggle to even get a look in, as deposit-rich buyers such as landlords and home movers snap up properties.”
“There’s an increasingly a race for space as well, as we see potential buyers are also showing more of an interest in houses over flats and apartments – largely triggered by the desire to have more living space and a garden as we settle into hybrid working, and come to realise the fact that many of us will be spending significantly more time at home for the foreseeable”.
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