The Nationwide building society have said that since monitoring the last year, there are “tentative signs that annual house price growth may be stabilising close to the pace of earnings growth, which has historically been around four per cent”.
UK average house prices rose 0.4% in July taking the annual speed of change up to 3.5%, according to one of the major price indices.
Jobs growth has remained relatively healthy in recent quarters and, after a prolonged period of subdued growth, wage growth is also slowly rising. Nationwide says the overall position on the status of demand remains encouraging, but warn that it remains unclear whether activity on the supply side will catch up with demand saying that “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.”
They go on to say that “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”.