UK house prices rising at 11% a year despite cost of living crisis
The UK housing market remained buoyant in July with price growth accelerating to an annual rate of 11%, according to the country’s biggest building society.
The average price of a home was £271,209 last month, up 0.1% from June when taking account of seasonal effects, and the 12th monthly rise in a row, said Nationwide building society. This took the annual change to 11% from 10.7%.
The market has been surprisingly strong throughout the Covid pandemic and despite the worsening cost of living crisis. It has been boosted by a strong jobs market, a persistent shortage of properties on the market and a “race for space” amid the rise in home working.
“The housing market has retained a surprising degree of momentum given the mounting pressures on household budgets from high inflation, which has already driven consumer confidence to all-time lows,” the Nationwide chief economist, Robert Gardner, said.
“While there are tentative signs of a slowdown in activity, with a dip in the number of mortgage approvals for house purchases in June, this has yet to feed through to price growth.”
Gardner said demand continued to be supported by strong labour market conditions, in which the unemployment rate remains near 50-year lows and the number of job vacancies is close to record highs. “At the same time, the limited stock of homes on the market has helped keep upward pressure on house prices,” he added.
The EY Item Club forecasting group noted that cost of living pressures are being felt disproportionately by low-income households, primarily those in rented accommodation.
Nicholas Finn, the managing director of Garrington Property Finders, said: “While many estate agents remain busy, buyers’ motivation is changing. Where previously price growth
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