UK house prices bucked expectations in July by rising more than economists’ forecast in a “modest rebound” for annual price growth in the market, mortgage lender Nationwide said on Wednesday.
Prices rose 0.6 per cent month-on-month from June, well above the 0.2 per cent monthly increase economists had anticipated according to a poll for Reuters although a slight slowdown from the previous monthly 0.7 per cent rise. At an annual rate, prices were 2.5 per cent higher than a year ago, up from the 2 per cent year-on-year rise recorded in June and ahead of expectations for a 1.9 per cent increase.
But the “slight uptick” was unlikely to indicate a significant change to the path of house prices, according to Nationwide chief economist Robert Gardner. “Annual house price growth remains within the fairly narrow range of [around] 2-3 per cent which has prevailed over the past 12 months”, he said.
While house price inflation would depend on conditions in the wider economy — including whether wage growth picks up further, and whether the Bank of England raises interest rates — “subdued economic activity and ongoing pressure on economic budgets is likely to continue to exert a modest drag on housing market activity and house price growth this year”, Mr Gardner said.
Growth was still likely to average around 1 per cent over 2018, he added.
