House prices rose at a faster monthly pace in August than in July but the market is set to cool as surging energy prices hit households and the Bank of England pushes up interest rates, mortgage lender Nationwide said this morning
House prices last month were 0.8% higher than in July when they rose by 0.2% from June.
Prices were 10.0% higher than in August 2021, a slowdown from July’s 11.0% increase but also above the Reuters poll forecast for a rise of 8.9%.
Robert Gardner, Nationwide’s chief economist, said there were signs that the housing market was losing momentum after the surge in demand for bigger homes during the COVID-19 pandemic.
“We expect the market to slow further as pressure on household budgets intensifies in the coming quarters,” Gardner said.
Rob Peters, director of Altrincham-based Simple Fast Mortgage: “Usually August disappoints, but not this year as new mortgage business levels have been through the roof. A solid mix of first-time buyers, remortgages, and buy-to-let applications has seen us through one of our best months ever. If anything, it’s the seasoned investors who are sitting on the sidelines waiting to see if the economic environment will provide a key opportunity. Our view is it remains a sellers’ market and that it’s going to take some some serious economic pressures to slow down the property market machine.”
Jamie Thompson of Manchester-based Jamie Thompson Mortgages: “First-time buyers remain out in force and some customers are returning earlier than anticipated for remortgage reviews, willing to pay penalties now to secure today’s rates in case of further interest rate raises. I’ve seen more borrowers revising down the purchase price they are looking at in some cases. This means that those who were looking to purchase for around £300,000 a few months ago are now considering smaller, more energy-efficient homes around £200k. Paradoxically this could mean more people competing for properties at lower price points, increasing the prices at the lower end of the ladder more than the higher, making it yet harder still for first-time buyers without access to the Bank of Mum and Dad. There’s no one market for housing in the UK. It varies by location and property type and size so different buyers and sellers can go through completely different experiences depending on their circumstances.”
