House Price Growth Stuttering but Starting

Nationwide has released its latest average UK property price figures.

Annual Prices Up (by default)

Yearly house prices in August 2024 increased by 0.3%pa to 2.4% pa compared to annual price increases in July 2024 of 2.1% pa.  On first glance, this appears a reasonable jump in prices, but it should not be forgotten that last summer on 2^nd August 2023, the Bank of England increased interest rates from 5.0%pa to 5.25%pa which was the 14^th consecutive rate rise at the time and was widely expected.  As a result, last summer property prices fell, so an increase just 1 year on from 2.1% to 2.4%pa is perhaps by default and not that significant as prices had further to come back from.

Monthly Prices Fall

For the month of July 2024, average prices increased by 0.3% but those gains were wiped out in August as monthly prices felly by -0.2%.

Nationwide also commented that many are now seeking property with better energy performance certificate (EPC) ratings given fuel prices are on the rise, pensioner winter fuel payments will stop for many, so better insulated property is in demand.

Comment

Interest rates have been reduced to 5.0% pa with more cuts expected depending upon the next Office for National Statistics (ONS) report for Consumer Prices Inflation (CPI) that is due on Wednesday 18^th September with the Bank of England then to report on interest rates the very next day.

Mortgage rates are falling with many new deals coming in below 4% pa now but sellers are also lowering their expectations, hence perhaps a fall in prices for August (as well as it being vacation season).

We expect the property market and property prices in general to start to tick slowly upwards again.