Editor's note: This brief was summarised by The Property AI Newsroom from a report by Mortgage Strategy. Read the original article for full details.

Nationwide Reports Subdued UK House Price Growth in August

UK annual house price growth remained broadly stable in August at 1.6%, with house prices rising by 0.2% month-on-month, according to the latest house price index from Nationwide. The report indicates that both market activity and house prices have remained subdued in recent months.

Nationwide’s chief economist, Robert Gardner, attributed the subdued market to the uncertain economic backdrop, including ongoing geopolitical tensions and the conflict in the Middle East, which have contributed to higher energy prices and market interest rates. Gardner noted that while energy price shocks pose inflation risks, there are signs that these are not significantly affecting underlying price pressures. He also highlighted that private sector wage growth has eased, potentially giving policymakers more time to assess the need for further policy tightening.

Gardner stated that underlying affordability is improving, as house price growth is well below earnings growth, though higher mortgage rates have offset some of these gains. He suggested that market activity could regain momentum in the coming quarters if energy prices stabilise and confidence returns, particularly if market interest rates decrease.

Amy Reynolds, head of sales at Richmond estate agency Antony Roberts, observed that prices are remaining flat, with sensible offers being accepted. She reported that there are currently more sellers than buyers, and asking prices are coming down, often due to initial overpricing. Reynolds also noted increased competition for certain new instructions, but said that supply continues to outstrip demand for smaller flats. However, she mentioned that more flat sales were agreed over the summer, indicating some renewed activity in that segment.

Mark Harris, chief executive of SPF Private Clients, commented that flat monthly house prices suggest buyers are negotiating rather than paying over the odds. He noted that lenders are continuing to trim mortgage rates, and the Bank of England’s steady approach to the base rate is providing some stability. Harris added that many borrowers are locking in mortgage rates several months in advance due to ongoing affordability concerns.

For letting agents and inventory clerks, the subdued market and stable prices may mean continued caution among both buyers and sellers, with affordability and supply-demand dynamics influencing activity, particularly in the flat market segment.