UK house price growth slowed to 2.1% in June, according to Nationwide’s latest house price index, down from 3.5% in May.
The decline may be partly attributed to higher stamp duty costs introduced in April. Prices dipped by 0.8% month-on-month, with the average price of a property in the UK falling to £271,619 last month, down from £273,427 in May.
Robert Gardner, Nationwide's Chief Economist, said: “The softening in price growth may reflect weaker demand following the increase in stamp duty at the start of April. Nevertheless, we still expect activity to pick up as the summer progresses, despite ongoing economic uncertainties in the global economy, since underlying conditions for potential homebuyers in the UK remain supportive.
“The unemployment rate remains low, earnings are rising at a healthy pace in real terms (i.e. after accounting for inflation), household balance sheets are strong and borrowing costs are likely to moderate a little if Bank Rate is lowered further in the coming quarters as we and most other analysts expect.”
Most regions see prices slow but Northern Ireland retains growth top spot
Nationwide reported a general slowdown in house price growth across most UK regions between April and June. However, Northern Ireland remained the strongest performer, with property prices rising by 9.7% year-on-year between April and June. This is a slight decrease from the 13.5% growth seen in the first three months of the year.
By contrast, Scotland saw a 4.5% annual increase, while Wales recorded a 2.6% rise. Across England overall, prices were up 2.5% year-on-year, down from 3.3% the preceding quarter.
Mr Gardner said: “The north-south divide in house price performance narrowed during the quarter. Average prices in Northern England (comprising North, North West, Yorkshire & The Humber, East Midlands and West Midlands) were up 3.1% year on year, whilst those in Southern England (South West, Outer South East, Outer Metropolitan, London and East Anglia) were up 2.2%.
“The North was the top performing region in England, with prices up 5.5%. Meanwhile, East Anglia was the weakest performer with annual growth of 1.1%.”
Terraced houses see strongest price growth
Among property types, terraced houses saw the highest annual price increase across all regions, rising by 3.6%. Detached and semi-detached homes followed with annual gains of 3.2% and 3.3% respectively, while flats saw minimal price growth of just 0.3%.
