UK House Prices Experience Modest Growth in June, but Challenges Signal Potential Falls Aheadadmin
House prices in the UK experienced a slight growth of 0.1% in June, resulting in an annual growth rate of -3.5%, according to Nationwide.
However, challenges in the mortgage market and increased supply suggest that future price falls are likely. Although mortgage approvals increased in May, they still remained below pre-COVID levels, and rising mortgage rates are expected to further suppress future approvals.
Completed transactions remained stable but were lower compared to the average in previous years. Surveyors reported increased supply and falling demand, which will exert downward pressure on prices. Rising mortgage rates, influenced by higher inflation and constrained affordability, will limit buying power and dampen market activity.
First-time buyers and those with high loan-to-value mortgages will face the greatest pressure. Government measures, including mortgage term extensions and interest-only mortgage transitions, aim to mitigate the impact of forced sales on housing supply.
In terms of rental growth, all regions except London and Scotland saw an acceleration in annual rental growth, with Wales experiencing the highest growth in May.