Over the year to June, house price growth improved slightly rising by 2.2% annually compared to 1.7% in May.
However, with the average UK property bearing a £278,024 price tag in May, the month of June appeared even slower for the housing market.
Robert Gardner, chief economist at Nationwide’s, said this was not surprising given the market has softened a little in recent months, caused by uncertainty because of events in the Middle East and the subsequent rise in energy prices and market interest rates.
“Indeed,” he added, “consumer confidence and measures of housing sentiment have weakened, and mortgage approvals fell noticeably in May.
“While geopolitical tensions remain high, the signing of a memorandum of understanding between Iran and the US helped push oil prices back towards the levels prevailing before the conflict began.
“If the energy shock continues to subside, the Bank of England may not need to raise interest rates, or at least by less than had previously been anticipated – a view reinforced by the fact that UK inflation has also been lower than expected in recent months.
“In recent weeks a shift in market expectations for the future path of Bank Rate has helped to bring down the market interest rates which underpin fixed-rate mortgage pricing.
“If maintained, these trends will help to restore household confidence and ease affordability constraints, paving the way for a recovery in housing market activity in the coming quarters, providing that domestic political uncertainty does not adversely impact sentiment.”
Closer analysis of the regions of the UK once again highlighted Northern Ireland as the exception to the flat price growth trend. It saw prices rise by 8.6% over the year – four times faster than the UK as a whole.
Gardner said: “This persistently strong performance has resulted in a deterioration in housing affordability in the region, in contrast with the UK average, which has generally been improving.”
It means the mortgage payment on a typical first-time buyer property in Northern Ireland is now equivalent to 31% of an average earner’s take home pay. This is up from the 24% at the same time in 2022. It is, however, still lower than the UK average of 33%.
A typical home in Northern Ireland is now around 80% of the average UK price.
Scotland and Wales both saw a slight pickup in annual house price growth to 3.5%, while in England the uplift was a far more modest 1.5%.
The South East of England saw the ‘most modest’ rises of 0.1%.
How have the prices impacted property sales and purchases?
According to estate agent, Amy Reynolds, head of sales at Richmond estate agency Antony Roberts, the picture is more nuanced for those in the process of buying and selling homes.
She said: “There is real caution at the more rate-dependent end of the market, but a good proportion of buyers are equity-rich or cash, and well-priced family homes in the right roads are still drawing competitive interest.
“There is the familiar pre-summer push from families wanting to be settled before the new school year, but the mood is steady and selective rather than booming or stalling.
“We expect a quieter, price-sensitive summer, with activity firming again in the autumn once buyers have more clarity on rates and the geopolitical noise has died down.”
