House prices rose at a double-digit rate for the 10th consecutive month in August as a lack of supply supported valuations despite mortgage rates increasing and the cost-of-living crisis.
The annual rate hit 10 per cent last month against 11 per cent in July, marking an uninterrupted double-digit expansion since October, according to Nationwide, the mortgage provider. The annual growth rate was much faster than the 8.9 per cent forecast by economists.
Robert Gardner, Nationwide’s chief economist said that the slowdown had to date been “modest” and, combined with a shortage of stock, meant price growth had “remained firm”. Prices were up 0.8 per cent between July and August, defying expectations they would come close to stagnating as inflation hit households and confidence. Instead, the rise took the average house price to a high of £273,751 more than two years ago.
Andrew Wishart, property economist at consultancy Capital Economics said that the figures suggested house prices “managed to retain some positive momentum despite growing pressure on households’ finances”.
Tomer Aboody, director of property lender MT Finance, said that “with less stock on the market buyers have little choice and are therefore outbidding to secure a home”. The Royal Institution of Chartered Surveyors data showed average stock per estate agent branch down to 35 in July, the lowest since records began in 1978. But with mortgage rates rising and the cost-of-living crisis deepening, many expect the market to cool in the coming months.
Tom Bill, head of UK residential research at property agent Knight Frank, said that the market was “playing a slow game of catch-up” with the economy adding, as supply continues to build this autumn and mortgage rates rise, demand will soften and annual price growth will fall."
