Figures released by Nationwide reveal that UK House prices (month on month) fell by 0.1 per cent in August, bringing the average cost of a home in the country down to £210,495. The modest fall represents an overall slowdown in annual UK house price growth from 2.9% to 2.1%, according to the building society’s latest House Price Index.

Robert Gardner, Nationwide’s Chief Economist, attributes the fall to mounting pressure on household finances and wages failing to keep up with the rising cost of living. Potential home buyers in London and the South East being the most impacted by rising inflation as well as increased Stamp Duty.

Demand for UK housing on the rise

The rise in stamp duty can be attributed to the recent introduction of a 3% duty on second homes as well as an overall increase in the value of property. In areas such as London, property has seen a 56% rise in value since 2007 compared to a national average 12% rise.

Yet despite the growing pressure of affordability of property being most acutely felt in London and the South East, demand in these areas continues to outstrip supply.

Commenting on the House Price Index, Robert Gardner, said: “…supply is likely to continue to provide support for house prices. The stock of homes on estate agents’ books remains close to 30 year lows and the number of new homes coming onto the market remains subdued. As a result, we continue to expect prices to rise by around 2% over 2017 as a whole.”

Source: Nationwide House Price Index: 

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