According to a survey from Nationwide, UK house prices rose by 3.25% year-on-year in August, which makes it the weakest annual pace since June 2013.
Month on month, prices rose 0.3% in August, compared to 0.4% in July. Also, according to the Nationwide house price index, the average house price in August was £195,279. Nationwide said that one of the reasons house price inflation has weakened is a rapid growth in prices at this time last year.
Robert Gardner, who is Nationwide’s chief econimist, had this to say: “This month’s data provides further evidence that annual house price growth may be stabilising close to the pace of earnings growth, which has historically been around 4%,” said Robert Gardner, Nationwide’s chief economist. Clearly house price trends are determined by a wide range of factors, but labour market developments are amongst the most important.”
He then went on to say, that since the demand for housing is rising, new home construction needs to increase to ensure that houses remain affordable. One thing you need to keep in mind, though, is that Nationwide’s figures are in direct contrast to the ones provided by their rivals, Halifax.
Halifax reported earlier this month that house prices in the UK were rising at 7.9% this year, and that they expect this growth to continue.
So why the difference between the two? Essentially, it comes down to the different methods used by the two different companies. They both use different “mix adjustments”, which involves a different emphasis on property sizes in order to account for the fact that more small or large houses may be sold in a month.