UK house prices increased 0.8% in July, according to the latest Nationwide House Price Index.
The typical UK home is now worth £170,825 which is 3.9% higher than the average price in July last year – meaning July saw the strongest rate of annual price growth since three years ago (August 2010).
Commenting on the figures, Robert Gardner, Nationwide’s Chief Economist, said:
“UK house prices rose by a robust 0.8% in July, providing further evidence of an upturn in the housing market. The annual rate of house price growth increased to 3.9% in July, though this figure was boosted by the low base for comparison, as prices declined by 2.6% in July 2012.
“House prices are currently around 12% higher than the lows seen in the midst of the financial crisis, though they are still around 10% below the all time highs recorded in late 2007. Signs of a modest improvement in wider economic conditions and further modest gains in employment are likely to be lifting buyer sentiment. An improvement in the availability and a reduction in the cost of credit, partly as a result of policy measures such as the Funding for Lending and Help to Buy schemes, are also boosting the demand for homes.
“At the same time, the supply side of the market remains fairly constrained. Building activity is still subdued – in Q1 housing completions in England were down 8% compared to the same period of 2012 and around 40% below the average number of quarterly completions in 2007. The fact that rental growth has been consistently outstripping wage growth reinforces the notion that housing more generally remains in relative short supply.”
Jonathan Hopper, managing director, property search consultants, Garrington, comments:
“We’ve seen three consecutive months of house price growth, and July was the biggest increase in any single month in 2013. The property market’s recovery is really picking up pace. Growth of less than 1% is far from the heady days of double digit monthly price rises. But this feels like a healthy recovery of a property market that was genuinely in the doldrums. London continues to operate in a stratosphere of its own, but it no longer feels like the capital is the property market’s sole prop.”