UK house prices edge up in July: Nationwide

United Kingdom home values rose in July, according to Nationwide Building Society, which said the market may be stabilizing after a year of cooling price growth.

The average UK house price is now £195,621, equivalent to a two-year rise of 14.5% according to Nationwide’s statistics.

Between June and July prices were up 0.4%, raising average house prices to £195,621.

“After moderating over the past twelve months, there are tentative signs that annual house price growth may be stabilising close to the pace of earnings growth, which has historically been around 4%”. The report claimed that demand is still encouraging, but if supply would keep up with this was called “unclear”. Employment growth has remained relatively robust in recent quarters, and, after a prolonged period of subdued growth, wage growth is also edging up.

Lower unemployment, wage growth and low mortgage rates means demand is more buoyant.

Rob Weaver, director of property at Property Partner, said he expected prices to rise more sharply from September.

The pressure could see values rapidly rising once again in the Autumn.

Overall, home buyers have also been better off since the stamp duty changes came into force. ‘The slab structure used to result in significant distortions with a clustering of transactions at the tax thresholds, ‘ he said.

‘Under that system, paying £1 more would result in significant additional stamp duty being due, for example, paying £1 over the £250,000 or the £500,000 threshold used to trigger an additional £5,000 of (stamp duty land tax).’.

What’s happening to house prices?

For the majority of home buyers, the tax has become cheaper, but the tipping point at which the tax becomes more expensive than under the old regime comes when homes cost upwards of £937,500.

LSL Property Services announced on Tuesday an 80pc slump in pre-tax profits to £6.2m in the six months to June 30.

Its data includes some analysis on the impact of stamp duty changes made last December.

By contrast, the lettings and surveying divisions performed well.

The annual pace of growth is considerably down on past year.

Chairman Simon Embley said the group’s performance had been “resilient” in an “evolving market”. “This would bode well for a sustainable increase in housing-market activity”.