The average UK house price fell 0.8% in June as the impact of changes to stamp duty impacted buyer activity after a spike in demand before the increase earlier this year.
“UK house price growth slowed to 2.1% in June, from 3.5% in May. Prices declined by 0.8% month-on-month, after taking account of seasonal effects,” said Robert Gardner, Nationwide’s Chief Economist.
“The softening in price growth may reflect weaker demand following the increase in stamp duty at the start of April. Nevertheless, we still expect activity to pick up as the summer progresses, despite ongoing economic uncertainties in the global economy, since underlying conditions for potential homebuyers in the UK remain supportive.
Gardner continued to explain that while there were signs of short-term softness in house prices, the medium-term outlook is favourable:
“The unemployment rate remains low, earnings are rising at a healthy pace in real terms (i.e. after accounting for inflation), household balance sheets are strong and borrowing costs are likely to moderate a little if Bank Rate is lowered further in the coming quarters as we and most other analysts expect.”
On an annual basis, East Anglia was the worst-performing region with house price growth of 1.1%, while growth in the North of England continued to steam ahead with price gains of 5.5%.