Notizie economiche
01.08.2024

House prices in the UK rose more than expected in July

Data published by Nationwide Building Society showed that housing prices rose by 0.3% in July, accelerating from June (+0.2%). Economists expected prices to increase by 0.1%. Overall, the latest increase is a sign that the housing market is stabilizing in the face of the highest interest rates in the last 16 years. The Bank of England later Thursday will decide whether to cut the key rate for the first time since the start of the pandemic.

In annual terms, house prices rose by 2.1% (the strongest pace since December 2022) after an increase of 1.5% in June. This was the sixth increase in a row. Consensus estimates suggested an increase of 1.8%. As a result, the average price of a typical home (not seasonally adjusted) was 266,334 pounds compared to 266,064 pounds in June. Nationwide said that house prices are now around 2.8% below the all-time highs recorded in the summer of 2022, after taking account of seasonal effects.

“Housing market activity has been holding relatively steady in recent months with the number of mortgages approved for house purchase at around 60,000 per month. It is still a respectable pace given the higher interest rate environment. For example, for borrowers with a 25% deposit, the rate on a five-year fixed rate deal has been around 4.6% in recent months, more than double the 1.9% average recorded in 2019. As a result, affordability is still stretched for many prospective buyers. Investors expect Bank Rate to be lowered modestly in the years ahead, which, if correct, will help to bring down borrowing costs. However, the impact is likely to be fairly modest. As a result, affordability is likely to improve only gradually," said Robert Gardner, Nationwide's Chief Economist.

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