UK house price growth slowed to 10% in August, according to Nationwide Building Society, down from 11% in July but up 0.8% month-on-month after taking into account seasonal effects.
Although annual house price growth softened in August, it remained in double digits for the tenth month in a row, after taking account of seasonal effects, prices increased for the thirteenth successive month.
When including last month’s increase, the average house price has increased by almost £50,000 over the past two years to £273,751.
Nationwide’s chief economist Robert Gardner 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.”
Gardner also noted that the upcoming energy price cap increase will have a greater impact on the value of the least energy efficient properties, with the most energy efficient properties currently paying £1,700 per year, while the least efficient typically see bills over twice as high at roughly £3,900 per annum.