The latest data and analysis from Nationwide has revealed that UK annual house price growth slowed to its slowest pace in five years during June- a 0.4% dip against the previous month. According to the figures, the capital was the weakest performing region in Q2, with prices down 1.9% year-on-year. The data revealed that most regions saw a slowing in the annual rate of house price growth in the second quarter. The only region to see a notable pickup was Scotland, where price growth accelerated to 3.1%. Northern Ireland recorded annual price growth of 2.1%, similar to the UK average, after posting an unusually strong growth rate in the first quarter (7.9%). Wales also saw a softening in price growth to 4% (from 6.1% in Q1). The East Midlands was the region that saw the strongest pace of growth in Q2, with prices up 4.4% year-on-year, just nudging ahead of the West Midlands at 4.3%.
Nationwide's Chief Economist, commented on the figures: “Annual house price growth fell to its slowest pace for five years in June. However, at 2% this was only modestly below the 2.4% recorded the previous month. Indeed, annual house price growth has been confined to a fairly narrow range of c2-3% over the past 12 months, suggesting little change in the balance between demand and supply in the market over that period.There are few signs of an imminent change. Surveyors continue to report subdued levels of new buyer enquiries, while the supply of properties on the market remains more of a trickle than a torrent.
Looking further ahead, much will depend on how broader economic conditions evolve, especially in the labour market, but also with respect to interest rates. Subdued economic activity and ongoing pressure on household budgets is likely to continue to exert a modest drag on housing market activity and house price growth this year, though borrowing costs are likely to remain low.
Overall, we continue to expect house prices to rise by around 1% over the course of 2018."