Nationwide Building Society has reported that annual house price growth softened in August.
That said, it remained in double digits for the tenth month in a row – at 10.0%.
Prices rose by 0.8% month-on-month, after taking account of seasonal effects – the 13th successive monthly increase. In the past two years, the average house price has increased by almost £50,000.
Robert Gardner, Nationwide’s chief economist, said: “There are signs that the housing market is losing some momentum, with surveyors reporting fewer new buyer enquiries in recent months and the number of mortgage approvals for house purchases falling below pre-pandemic levels. However, the slowdown to date has been modest, and combined with a shortage of stock on the market, has meant that price growth has remained firm.
“We expect the market to slow further as pressure on household budgets intensifies in the coming quarters, with inflation set remain in double digits into next year. Moreover, the Bank of England is widely expected to continue raising interest rates, which will also exert a cooling impact on the market if this feeds through to mortgage rates, which have already increased noticeably in recent months.”
Emma Cox, managing director of real estate at Shawbrook, added: “House price growth has remained remarkably robust given the worsening economic headwinds. However, we are now seeing inflationary pressures and higher borrowing costs having a bigger impact.
“Prices are continuing to be buoyed by a lack of properties on the market. The sector remains in desperate need of an influx of affordable, energy-efficient stock. The candidate who emerges as prime minister on Monday will need to put solutions in place to help alleviate challenges.
“In the rental sector, the lack of supply, high demand, and pressures on household finances mean that costs are likely to be passed on to tenants, and rental prices are set to rise further.
“Lenders remain keen to support buyers and are competing to offer favourable rates and LTVs. Shopping around now and locking in a fixed rate now will be a key to protecting prospective buyers against any further interest rate rises.”