House Prices Growing at Fastest Rate in nearly Two Years
Date Published: 4 September 2024
House prices are now growing at the fastest annual rate in nearly two years, the UK’s largest building society has said, with rises expected to continue.
In the year up to August, houses became 2.4% more valuable with the average property costing £265,375, according to Nationwide.
But prices are still below the all-time highs recorded in the summer of 2022 by about 3%. During that time people were spending lockdown savings as COVID-19 restrictions were unwinding and borrowing rates had not reached the current highs.
The annual increase and associated increase in buying demand is still “subdued by historic standards”, Nationwide said.When the broader economic conditions of high interest rates and house prices costing many multiples of wages are considered, the price increase demonstrates resilience in the sector, the lender added.
What next?
Prices will continue to rise, Nationwide forecast.
“Providing the economy continues to recover steadily, as we expect, housing market activity is likely to strengthen gradually as affordability constraints ease through a combination of modestly lower interest rates and earnings outpacing house price growth,” Nationwide’s chief economist Robert Gardner said.
Tom Bill, head of UK residential research at estate agent Knight Frank, said: “The UK housing market is in a better place than it was last summer as inflation comes under control and lenders trim their rates.
“Financial markets are pricing in another cut this year and as mortgage rates fall this autumn, it should underpin transactions and modest single-digit price growth.”
Iain McKenzie, chief executive of the Guild of Property Professionals, added: “Estate agents across the country are telling us that the market conditions in their areas are improving and there is a strong demand for good-quality housing.”
Source: Sky News