House prices rise 10% in a year, but start to slow, says Nationwide

House price inflation slowed slightly in August but remains in double digits, despite turbulent economic conditions and inflation and mortgage rate hikes affecting buyers.

Home prices rose 10 percent in the year to August 2022, according to the latest Nationwide index, down from 11 percent housing inflation in July.

But despite rapid increases in mortgage rates and larger bills hampering borrowers, house prices continued to rise, rising 0.8 per cent over the month to bring the cost of the average house out of £ 271,209 to £273,751.

Coming out of the boil? House prices were up 10% in the year to August 2022, but that was down from 11% in the year to July.

This was the 13th successive monthly increase and the median house price has risen by almost £50,000 in two years.

Robert Gardner, chief economist at Nationwide, said the housing market remained strong, but some of the momentum was coming from it.

He said: ‘There are signs the housing market is losing some momentum, as pollsters have reported fewer inquiries from new buyers in recent months and the number of mortgage approvals for home purchases is falling below pre-pandemic levels.

“However, the slowdown to date has been modest and, combined with the tightness of stocks in the market, has meant that price growth has remained strong.”

Others expressed surprise at the continued growth.

Andrew Montlake, Coreco’s managing director of mortgage brokerage, said: ‘It’s frankly mind-boggling that annual house price growth is still in the double digits. However, with inflation and energy bills rising into the stratosphere, and rates rising even higher as well, the real estate market will soon be back down to earth.

“The only constant in these times of extreme change, of course, is the lack of supply and housing under construction. The abject lack of quality, affordable housing will support prices even as we go through an unprecedented cost of living crisis.”

House prices continue to rise, fueled by a lack of housing supply and constant demand.

House prices continue to rise, fueled by a lack of housing supply and constant demand.

Tom Bill, director of UK Residential Research at Knight Frank, says he doesn’t expect to see a cliff-edge price move, although growth will continue to weaken to single digits, but warns that the political climate may hit prices further. prices.

‘The management of the economy under the new Prime Minister is now the key risk facing the property market. If unemployment remains low, inflation remains relatively contained and we avoid the Bank of England’s prediction of a recession lasting more than a year, prices should continue to rise modestly,” he added.

And while the slowdown may seem hopeful to potential first-time homebuyers, rising prices have left the median home costing more than seven times earnings, well above the long-term average of 4.5 times.

The home price to earnings ratio continues to rise, with prices now exceeding median earnings by 7 times, well above the long-term average of 4.5.

The home price to earnings ratio continues to rise, with prices now exceeding median earnings by 7 times, well above the long-term average of 4.5.

Britain’s largest building society has also warned that rising energy costs will hit the least energy-efficient homes hardest in the coming months.

Gardner noted that Ofgem’s price cap, which will rise 80 percent from October 1, applies to the unit price charged to consumers, rather than the maximum bill that can be charged to a household.

So while a typical household is set to pay £3,549 a year, for some costs it will be even higher.

Despite rising interest rates, house prices have continued to rise in the UK, but there are signs the market may be slowing as mortgage approvals fall to pre-pandemic levels.

Despite rising interest rates, house prices have continued to rise in the UK, but there are signs the market may be slowing as mortgage approvals fall to pre-pandemic levels.

It added: ‘We have looked at the impact of rising energy costs on average bills for properties with different energy efficiency ratings (as reported on energy performance certificates).

‘Currently (based on April 2022 price cap), the most energy efficient properties (those AC rated) pay £1,700 per year, while the least efficient (those FG rated) typically see bills more than double £3,900 per year’

The best mortgage rates and how to find them

Mortgage rates have risen substantially as the Bank of England base rate has risen rapidly.

If you’re thinking about buying your first home, moving or remortgaging, or are a buy-to-let landlord, it’s important to get good, independent mortgage advice from a broker who can help you find the best deal.

To help our readers find the best mortgage, This is Money has partnered with independent broker L&C.

Our L&C-powered mortgage calculator can allow you to filter offers to see which ones best match your home value and deposit level.

You can also compare different fixed-rate mortgage durations, from two-year arrangements to five-year arrangements to ten-year arrangements, with monthly and total costs displayed.

Use the tool at the link below to compare the best deals, taking both fees and rates into account. You can also start an online application on your own time and save it as you go.

> Compare the best mortgage deals available now

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