House price growth at 15-month low

The average house price rose by just £200 this month as interest rate rises took their toll on price inflation, it has been revealed.

Nationwide reports that the price of the average home rose by just 0.1 per cent, down from 1.1 per cent in June. This had a knock on effect on annualised inflation, which fell from 11.1 per cent last month to 9.9 per cent in July.

But with the economy still performing well in the face of five rate hikes in 11 months, the lender predicts that slower price growth may well continue for the foreseeable future.

"The sharp slowdown in July’s house price numbers could show that potential homebuyers are thinking twice about overstretching themselves in a higher interest rate environment," commented Fionnuala Earley, chief economist at Nationwide.

"Fundamentals do suggest that household finances are coming under considerable pressure, and that house prices and consumer spending will both see a slowdown in the second half of the year," Ms Earley added.

Earlier this week the deputy governor of the Bank of England advised that rates may well rise again before the end of the year in order to counter inflation, which currently stands at 2.4 per cent.


© Adfero Ltd