Annual growth in UK house prices slowed to 10% in August from 11% in July – and the average value of a home has risen by almost £50,000 over the past two years.
The figures come from the latest National House Price Index, which shows prices rose 0.8% in the past month, after accounting for seasonal effects.
“While annual house price growth slowed in August, it remained in double digits for the tenth consecutive month. [and] … the thirteenth consecutive monthly increase. Indeed, over the past two years the average house price has risen by almost £50,000,” says Robert Gardner, Nationwide’s chief economist.
He continues: “There are signs that the housing market is losing momentum, with surveyors reporting fewer inquiries from new buyers in recent months and the number of mortgage approvals for home purchases falling below levels. before the pandemic.
“However, the slowdown to date has been modest and, combined with a shortage of inventory in the market, has meant that price growth has remained firm.
“We expect the market to slow further as pressure on household budgets intensifies over the coming quarters, with inflation expected to remain in double digits through next year.
“Additionally, the Bank of England is expected to continue raising interest rates, which will also have a chilling effect on the market if this spills over to mortgage rates, which have already risen significantly. these last months.”
Nationwide has also completed an analysis of the new energy bill price cap increase and its impact on household budgets. Gardner explains: “As things stand, from October average bills for Energy Performance Certificate D rated properties (the most common type) are expected to rise by just over £1,250 per year. year, even after taking into account the government’s £400 rebate.
“Those in A-C rated properties will see their average bills rise by almost £1,000 a year (equivalent to over £80 a month). E-rated properties will see an increase of over £1,700 per year (around £150 per month), while those with the least energy efficient (F/G) properties will face a staggering increase of £2,700 (£225 per month). month).
“While only a small proportion of the stock is F/G rated (around 2% of those with mortgages), the challenges for these households appear particularly acute.
“Overall, the average increase equates to an interest rate hike of 1.36%, but around 1% for properties rated A to C, 2% for an E-rated property and almost 3% for an F-rated property. / G-. listed property.
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