UK property prices are showing signs of slowing with interest rate hikes and the purchasing power crisis, after two years of soaring in the wake of the pandemic. According to mutual finance body Nationwide’s UK house price index, released on Thursday, price increases slowed to 10% in August from 11% in July, but this remains the 13th month of rising prices. in a row. Over the past two years, the average price of a house in the United Kingdom has jumped 50,000 pounds to 273,751 pounds (+22% in one year).
The competing index compiled by the real estate classifieds site Rightmove indicates, for its part, “a decline for the first time this year in the price of newly put on the market propertiesin August, although this follows a seasonal trend, with summer holidays taking precedence over property searches. “There are signs that the housing market is losing momentum“with fewer inquiries from potential buyers in recent months and the number of loan approvals for purchases falling below pre-pandemic levels,” Nationwide notes.
Lack of available goods
This slowdown remains, however,modest”, and, combined with a persistent lack of goods on the market, causes prices to remain supported, the press release adds. In a statement, Rightmove also notes a request that “continues to slow down and constraints on the supply of goods are easing, even if there remains a huge gap between demand and available goods“. Requests to real estate agents have weakened a little over a year but remain 20% higher than 2019, before the pandemic, while available properties are down 39% compared to 2019, specifies Rightmove.
Nationwide, however, expects that “the market slows further as pressure on household budgets intensifies in the coming quarters“, with inflation at 10% which will accelerate further and interest rates which should be further raised by the Bank of England, which could have an impact on property rates and household borrowing capacity.
Read alsoReal estate, the UK’s leading sector facing a sharp slowdown
Martin Beck, an economist at EY Item Club, believes Nationwide figures, however, show that the UK market “still has support» in particular because the «consequences of the cost of living crisis will hit low incomes the hardest», who often rent their accommodation more than they buy it.