London house price growth slows as rest of United Kingdom bounces back


Samuel Tombs, chief United Kingdom economist at Pantheon Macroeconomics, said: "June's increase in house prices fully reverses the 0.9% decline seen over the previous three months and brings Nationwide's measure in line with Halifax's, which has shown a flat trend since the start of the year".

United Kingdom house price growth rebounded in June following falls in the previous three months.

On an annual basis house prices rose 3.1 percent in the year to June and the price of an average house now stands at £211,301, which is up on the £208,711 seen in May, according to the mortgage lender.

Across the whole of the UK, Nationwide measured a 1.1% uptick in house prices in June which erased the decline it recorded over the previous three months.

Robert Gardner, Nationwide's chief economist, explained that price growth in the South of England has moderated, converging with the rates prevailing in the rest of the country. And London house price rose at the slowest annual pace since 2012, by 1.2% year-on-year.

House prices in Britain rebounded in June, bringing a three-month decline to an end, and momentarily cooling concerns the squeeze on household budgets was impacting the property market. Over the past three decades, United Kingdom households have cut spending every time that house prices have fallen. This, together with ongoing housing affordability pressures in key parts of the country, is likely to exert a drag on housing market activity and house price growth in the quarters ahead, ' Gardner explained.

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The gap between the strongest-performing region of East Anglia and the weakest in the north is the smallest since records began in 1974, but there is still a huge price gap between locations. The annual growth rate increased to 3.1% from 2.1% in May, above the 1.9% consensus.

"Given the ongoing uncertainties around the UK's future trading arrangements, the economic outlook remains unusually uncertain, and housing market trends will depend crucially on developments in the wider economy", Mr Gardner said.

Due to the shortage of properties and subdued building activity, values will still rise this year, he said, predicting an average gain of about 2 per cent.

And Jeremy Leaf, north London estate agent and a former RICS residential chairman, said: "These figures are a little surprising when you consider some of the mixed messages that we have been receiving from the housing market over the past few months".

'Buy to let investors who are making offers are factoring in the extra stamp duty hit on second homes and offering well below asking price.