The Nationwide Building Society has reported that UK house prices increased by 0.4% in July, and as a result the annual pace of house price growth edged up to 3.5% from 3.3% in June.
The average price of a home (not seasonally adjusted) totalled £195,621 in July.
Robert Gardner, Nationwide’s chief economist, said: “After moderating over the past twelve months, there are tentative signs that annual house price growth may be stabilising close to the pace of earnings growth, which has historically been around 4%.
“This would bode well for a sustainable increase in housing market activity, though whether this will be maintained will depend on whether building activity can keep pace with increasing demand.
“The outlook on the demand side remains encouraging. Employment growth has remained relatively robust in recent quarters, and, after a prolonged period of subdued growth, wage growth is also edging up. With consumer confidence buoyant and mortgage rates still close to all-time lows, demand for housing is likely to firm up in the quarters ahead.
“It remains unclear whether activity on the supply side will catch up with demand. The number of new homes under construction has started to pick up, albeit from historically low levels, and further increases are required if a sustainable recovery in the housing market is to be maintained over the longer term.”
Ben Thompson, managing director of estateagent4me, said: “Today’s Nationwide House Price Index has revealed that property prices have increased by an average of 0.4% since July. While some may argue that this latest rise is simply a reflection of the growing economy, the reality is that buying a property remains unachievable for many Britons.
“Until the government takes steps to reduce the vast gulf between supply and demand with a more sustained building programme, homeowners will need to use all of the resources available to ensure that their money is going as far as possible when buying or selling a home. Our research has revealed vast differences in what sellers can expect with different estate agents, not only in terms of how quickly these deals can be completed, but also the sale price agreed.
“With a rise in interest rates almost certainly on the cards during the next 12 months, sellers need to act now to ensure they can achieve a swift sale at the best price possible – and this cannot be achieved by choosing an agent based purely on gut feel. Motivated sellers should choose the best agent based on hard data surrounding their performance, rather than word of mouth alone.”