House prices growth slows

Nationwide figures add to evidence that the housing market is starting to cool.

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by Chris Marshall on Jun 30, 2010 at 08:25

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House prices rose just 0.1% in June, a much slower pace than previous months, figures from Nationwide show.

The Nationwide numbers echo other house price surveys, such as Halifax’s, which have shown the housing market recovery stalling.

The slowdown is in part due to the increasing amount of property coming to the market which is not being matched by demand.

The building society had reported growth of 0.5% the previous month and 1% before that. Halfway through the year, prices have grown a total of 3%.

Its latest figures show that the annual rate of house price inflation dropped for the second consecutive month from 9.8% to 8.7% as prices were increasing at a faster pace this time last year.

Martin Gahbauer, Nationwide's chief economist said: ‘Barring a significant pick-up in house prices over the next few months, the annual rate of inflation should continue to drift lower, in light of the very strong price increases recorded during the summer of 2009.

Gahbauer said the increase in supply of properties on the market might be due to the coalition government’s abolition of Home Information Packs.

Halifax recently reported a second straight month of house price declines. The Land Registry, which lags other indices, reported this week that House prices had fallen by 0.2% in May, the first negative monthly movement it had recorded for over a year.

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4 comments so far. Why not have your say?

This proves we are not out of the woods yet

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The Nationwide House Price Index is right up there with Bleak House as one of the greatest works of fiction. A .1% increase indeed - they will only admit that house prices are actually falling when it is so blindingly obvious that they cannot but admit it.

House prices are still far too high and instead of looking after their own interests the Nationwide should come out and say that rising house prices are actually A BAD THING. A bad thing for those who are forced to take out colossal mortgages with the Nationwide and a bad thing for the economy generally.

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When house prices mean that someone with two degrees on an average London salary has to borrow 10 times salary to buy a (at best) 2 bedroom flat, prices have to and should come down. Those who bought 10 years ago wil stil have equity in their homes even if the prices fell by half and anyone else who took on a mortgage latterly that they couldn't afford should have been mindful that interest rates would eventually go back to regular rates and that they might end up in negative equity - just as we saw young buyers having to move out of their houses or sell at a loss 15 years ago. I sold two properties last year and the year before - I can't undestand all these 'industry experts' who say that 'no-one' saw this crisis coming. Obviously they earn too much money to see how inflationary house prices have affected the man in the street (even in London).

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Ian Parker

Jun 30, 2010 at 11:39

Lydia, spot on

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