House prices rise at slowest pace for five years

UK house prices in June grew at their slowest rate since 2013, according to latest figures from Nationwide.

Annual growth was 2% in June, the building society’s house price index found, down from 2.4% in May. The average price of a property in the UK is currently £215,444.

Growth has remained in the 2-3% range over the past year, which Nationwide said suggests there has been little change in the balance between supply and demand over that period. Numbers of new buyer enquiries remain “subdued”, with the supply of properties on the market more of a “trickle than a torrent.”

Regional variations

Most areas recorded a slowing in growth, but the capital was the weakest performing region in the second quarter, with prices down 1.9% year-on-year. It was the only area of the UK to see a fall in prices. However, despite the decline, prices in London are still more than 50% above their 2007 peak, at an average cost of £468,845. Across the UK as a whole, prices are 15% higher than in 2007.

The strongest performing region in the UK was the East Midlands, with prices up 4.4% year-on-year. The average price of a property in the East Midlands is now £181,549, the building society said. The least expensive region in the UK is the North, where the average annual house price is £127,266. In some Northern areas prices are below the level they were at in 2007.

The only region which saw a significant pickup in annual growth over the past quarter is Scotland, where prices rose by 3.1%. England as a whole saw weak growth, with prices up just 1.3%, compared to growth of 2.1% in Northern Ireland and 4% in Wales. Price growth in Northern England exceeded that in Southern England for the fifth consecutive quarter, with a 3.3% year-on-year increase compared to a 0.5% increase in the South.

Overall, the building society said it expected house prices to rise by around 1% over the course of 2018.