House prices fall back but supply still critically low

UK house prices fell a marginal 0.2% in June, Nationwide has reported.

The slight fall reversed May’s rise of 0.2% and brought annual UK house price inflation down to 3.3%.

The average price is now £195,055 according to the lender.

Paul Smith, chief executive of Spicerhaart, said: “Nationwide’s report of national house price growth slowing is a step in the right direction for affordability but we are still finding that demand for homes is outpacing supply.

“Our data shows there are now 11 prospective buyers chasing each new property instruction across the UK, compared to eight at the same time three years ago.

“The formation of property chains is still proving difficult. While many are keen to move, and would do so if the opportunity presented itself, the difficulty is in securing an onward purchase.

“This is having a stagnating effect and there is a desperate need for a more liquid market, through an injection of supply.

“We are also hearing reports from branches that downsizing has become a dirty word and is seen as carrying negative connotations – that the seller has somehow lost their zest for life.

“Changing this attitude to release more family homes for second-steppers would ensure our limited housing stock is used in the most efficient way. Without this healthy churn in the market, first-time buyers will continue to be priced out.”

Robert Gardner, Nationwide’s chief economist, said: “The slowdown in house price growth is not confined to, nor does it appear to be driven primarily by, developments in London.

“In quarter on quarter terms, London has continued to see price growth at or above the rate in the UK overall over the past three quarters, while the annual rate of price growth in the capital remains the second highest in the country.”