A strong labor market and limited housing supply helped support double-digit year-over-year UK house price growth in July, despite rising interest rates, high inflation and low affordability. than.
UK house prices rose at an annualized rate of 11% last month, up slightly from 10.7% in June, according to mortgage provider Nationwide.
The increase took the median house price to £271,209, £55,000 higher in February 2020, before the Covid-19 pandemic.
“Demand continues to be supported by strong labor market conditions,” said Robert Gardner, chief economist at Nationwide. “At the same time, the limited supply of houses in the market has contributed to increasing house price pressure.”
However, the impact of inflation is at a 40-year high of 9.4% and record low consumer confidence is underlined by the cooling of Nationwide-managed mortgage deals.
According to a Nationwide report, total housing market transactions in the three months to May were about 20 percent lower than the increase due to the tax break. However, they are still 5% above pre-pandemic levels.
Mortgage moves have slowed more than in other sectors, while first-time buyer mortgage completions are still resilient.
This is despite home price growth continuing to outpace incomes by a wide margin, increasing the down payment required. Together with higher interest rates, these have pushed up mortgage payments relative to income.