UK house prices reach new all-time high, Nationwide says
House prices increased to another new all-time high of £188,949 on average in July, Nationwide has reported
According to the building society's House Price Index, prices rose by 0.1% in July – the smallest increase since April 2013 – but they have risen by 10.6% over the last year. (See our Mortgages and House Buying section if you're looking to buy a home.)
Last month, the average house price was £188,903 according to Nationwide.
The building society's chief economist Robert Gardner says the smaller price increase "was not entirely unexpected, given mounting evidence of a moderation in activity in recent months".
He adds: "Mortgage approvals declined by almost 20% between January and May, and there has also been some softening in forward looking indicators, such as new buyer enquiries.
"At least part of the slowdown in activity relates to the introduction of Mortgage Market Review measures. The modest rebound in mortgage approvals in June adds weight to the notion that the slowdown will prove temporary, though the underlying pace of demand remains unclear.
"With the labour market strengthening, mortgage rates expected to remain low and consumer confidence rising, activity is likely to recover in the months ahead."
In June, the Bank of England revealed plans to curb riskier mortgage lending by announcing that loans of 4.5 times a borrower's income or higher should account for no more than 15% of new mortgages issued by lenders (see the Risky mortgage clampdown MSE News story).
It also said lenders should apply a new "stress test" to make sure borrowers can keep up their repayments even if interest rates rise by 3% over the first five years of the loan.
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