The Nationwide Building Society has reported a rebounding of house prices in June, with prices rising by 1.1% during the month.
House prices in London continued to slow down, however.
The Nationwide said the average price of a home in June was £211,301.
Robert Gardner, the Nationwide’s chief economist, said: “The annual rate of house price growth, which gives a better sense of the underlying trend, continues to point to modest price gains. Annual house price growth edged up to 3.1% from 2.1% in May. In effect, after two sluggish months, annual price growth has returned to the 3-6% range that had been prevailing since early 2015.
“There has been a shift in regional house price trends. Price growth in the South of England has moderated, converging with the rates prevailing in the rest of the country. In Q2 the gap between the strongest performing region (East Anglia, which saw 5% annual growth) and the weakest (the North, with 1% growth) was the smallest on record, based on data going back to 1974. Nevertheless, when viewed in levels, the price gap between regions remains extremely wide.
“London saw a particularly marked slowdown, with annual price growth moderating to just 1.2% – the second slowest pace of the 13 UK regions and the weakest pace of growth in the capital since 2012.”
Jeremy Duncombe, director of Legal & General Mortgage Club, added: “House prices continue to rise above inflation. Whilst demonstrating the market’s resilience in the face of political uncertainty, this will be sobering news for many first-time buyers who are struggling to make their first step onto the ladder. For a healthier market, what we need to see is property prices rising in line with inflation.
“With Monday’s announcement of a coalition agreement, the newly-formed government must consider solutions to restructure our housing market and introduce measures that bring house price inflation in line with earnings. More affordable housing needs to be built to allow all those who wish to do so, a better chance of achieving homeownership. More than that, however, we also need to see incentives for home movers and last time buyers looking to downsize, so that we can get our housing market on the move.”