30
Jun
House Price Index Continues To Rise In June
House prices rose again in June but only by 0.1%, according to
the Nationwide building society.
The rise follows a 0.5% increase in May, with the average
property in the UK now costing more than £170,000.
Prices have risen by 3% since the start of the year, the
Nationwide's house price index showed.
However, the rate of annual house price inflation fell again to
8.7%, with prices rising more slowly than they did this time last
year.
Commenting on the figures, Nationwide's chief economist Martin
Gahbauer said the slowdown may be due to an increase in the number
of properties up for sale.
"Recent indicators point to an increase in the supply of
property coming to the market for sale, perhaps in response to the
abolition of Hips (Home Information Packs) in the opening days of
the new coalition government," he said.
"With the level of demand remaining broadly stable, this would
in part help to explain the recent slowdown observed in the rate of
house price inflation."
The coalition government confirmed that Hips would be abolished
following the election in May.
Future prices
Mr Gahbauer added that he expected the annual rate of house price
inflation to keep falling over the coming months as a result of the
very strong house price increases seen in the summer of 2009.
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The top end of the market is still performing remarkably well
David Smith
Carter Jonas
House price surveys explained
Various house price surveys have suggested that property values
have remained relatively static in 2010. This is the first survey
that covers prices in June.
Mr Gahbauer said that the change in the top rate of capital
gains tax to 28%, to be paid when people sell, give away or dispose
of shares or property, is unlikely to have a major effect on the
supply of properties on the market.
David Smith, of property consultants Carter Jonas, said: "Where
house prices go from here is difficult to predict because there are
so many factors at work at the moment.
"The fallout from the Budget will certainly have a major role to
play in the coming months, with uncertainty surrounding impending
public sector cuts and higher taxes, and of course we still have
the ever-present threat of interest rate rises in the mix.
"Although these figures suggest house prices are starting to
flatten out at their current level, the top end of the market is
still performing remarkably well, with double-digit price growth
since the start of the year, and a stronger than ever demand for
properties in desirable locations."
Over the second quarter of the year, the South West of England
saw the strongest house price growth with prices rising by 3%,
followed by the North West at 2.6% and London at 2.5%, the
Nationwide said.
The average cost of a home is continuing to fall in Northern
Ireland, with prices dropping by 5.7% during the second quarter,
while growth was slowest in the East Midlands at 1.2%.