During June this year, the average house price across the UK fell by 0.2%. Nationwide have released statistics that reveal that the annual level of growth in the UK housing market has fallen to its lowest point for two years.
Nationwide stated that its research showed that June 2015v was only 3.3% higher than its level at the same point last year. This represents a fall from the 4.6% increase in May and was down even further from the 11.8% recorded a year ago. All of this means that the mean price of a house in Britain now stands at £195,055.
After a frantic start to 2014, price rises have been decreasing since around September last year. This is a pattern that is reflected across the whole of the UK and not just restricted to London. When the amount of growth was examined on a regional level, it was revealed that it has been slowing down in 11 out of 13 areas. London currently has the second highest rate of growth in the whole country.
Robert Gardner, the chief economist at Nationwide, stated:
“House price growth continues to outpace earnings, but the gap is closing, helped by a pickup in annual wage growth, which moved up to 2.7% in the three months to April from 1.9% at the start of the year.”
“The slowdown in house price growth is not confined to, nor does it appear to be driven primarily by, developments in London. In quarter on quarter terms, London has continued to see price growth at or above the rate in the UK overall over the past three quarters.”
Nationwide's research is based upon the average cost of mortgages approved by the bank in the last month. It revealed that Northern Ireland is now ahead of London in terms of its growth levels and currently has the highest rate of annual growth.
In the three months leading to June, compared to the same months in 2014, prices in Northern Ireland rose by an average of 8%. Prices in London rose by around 7.2% over the same period, reaching an average of £429,711. Houses in the area that surrounds London saw their prices rise by 6.8%, reaching an average of £315,620.
Even though the Northern Irish market has had high levels of growth, they are still 45% lower than they were when they reached their highest point in 2007. In the London the story is quite different, with house prices already 39% up on what they were during the last peak.
Howard Archer, who is the chief economist at IHS Global Insight, admitted that he had been "slightly surprised" by the dip in prices.
However he was quick to point out that the quarterly figures still displayed a 1% rise in comparison to the 0.6% rise in the early months of the year.
He stated that this slight fall in growth "does not fundamentally change our view that house prices are likely to be firmer over the second half of the year amid improving activity."
“A current shortage of properties on the market is also likely to provide support to house prices.”
Nationwide also revealed that it will be changing its process for determining house price rises due to alterations to the application process.
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