The Nationwide Building Society has reported that July saw a 0.3% month-on-month rise in house prices.
It was the eighth month in a row that annual house price growth remained below 1%.
Robert Gardner, Nationwide’s chief economist, said: “While house price growth has remained fairly stable, there have been mixed signals from the property market in recent months.
“Surveyors report that new buyer enquiries have increased a little, though key consumer confidence indicators remain subdued. Data on the number of property transactions points to a slowdown in activity, though the number of mortgages approved for house purchase has remained broadly stable.
“Housing market trends will remain heavily dependent on developments in the broader economy. In the near term, healthy labour market conditions and low borrowing costs will provide underlying support, though uncertainty is likely to continue to exert a drag on sentiment and activity.
“Taking a longer-term view, housing market activity has been broadly stable in recent years, with the number of properties changing hands equal to around 5% of the total number of homes in the UK.
“This turnover rate (of around 5%) is significantly higher than the lows seen in 2009, but is still well below the rates of 8% seen pre-crisis, as shown in the chart above right.
“One of the key factors behind the low turnover rate is the continued weakness in home mover activity, which is still less than half the levels prevailing in 2007.
“By contrast, first time buyer transaction numbers have now almost recovered to pre-crisis norms. This reflects the steady improvement in labour market conditions in recent years, together with historically low mortgage interest rates, and an improvement in credit availability (including the introduction of schemes such as Help to Buy).”
Mark Harris, chief executive of mortgage broker SPF Private Clients, added: “First-time buyer numbers have recovered to pre-crisis norms but there is still a lack of people willing to move home. Lack of properties on the market is undoubtedly playing a part as sellers wait and see what happens with Brexit before making a decision. The cost of moving is also having an impact, with homeowners remortgaging and releasing cash to improve their homes, rather than shelling out tens of thousands of pounds on stamp duty.
“The number of mortgages approved for house purchase remains broadly stable with lenders keen to lend. Several lenders, including NatWest, have been reducing pricing across their product ranges, while others compete for business by tweaking criteria to make it more favourable, such as lengthening maximum mortgage terms and loan sizes.”
