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Nationwide sees house price growth accelerate


The latest housing pricing index from Nationwide has shown that the increase of pace in UK house prices accelerated in July to 3.5%.

UK house prices increased overall by 0.4% in July, taking the average cost of a home from £195,055 in June to £195,621in July. The report claimed that demand is still encouraging, but if supply would keep up with this was called “unclear”.

The report also showed that house price growth may be "stabilising close to the pace of earnings growth" which had historically been around 4% a year.

Some industry expert think that the market looks uncertain at the moment, as a potential change in interest rates could change the overview massively. The change in Stamp Duty rules have also had an effect of the market, and Nationwide estimate that the change has led to £275m less tax being paid.

Robert Gardner, Nationwide's Chief Economist, said:
“After moderating over the past twelve months, there are tentative signs that annual house price growth may be stabilising close to the pace of earnings growth, which has historically been around 4%.

“This would bode well for a sustainable increase in housing market activity, though whether this will be maintained will depend on whether building activity can keep pace with increasing demand.

“The outlook on the demand side remains encouraging. Employment growth has remained relatively robust in recent quarters, and, after a prolonged period of subdued growth, wage growth is also edging up. With consumer confidence buoyant and mortgage rates still close to all-time lows, demand for housing is likely to firm up in the quarters ahead.

“It remains unclear whether activity on the supply side will catch up with demand. The number of new homes under construction has started to pick up, albeit from historically low levels, and further increases are required if a sustainable recovery in the housing market is to be maintained over the longer term."

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