House prices rose for the second month running due to a shortage of properties for sale, according to Nationwide.
The building society found that prices rose by 0.3 per cent during July, while annual house price growth stands at 2.9 per cent. This is much lower than in the same month last year, when annual price growth was 5.2 per cent.
The average house price hit a new record of £211,671 in a new record for Nationwide’s index.
The report says that this growth comes despite recent signs of cooling in the market. In June the number of housing transactions fell to its lowest level for eight months, while the number of mortgages approved for house purchases fell to a nine-month low.
Commenting on the findings, Robert Gardner, Nationwide’s Chief Economist, said that “a lack of homes on the market appears to be providing support, with annual house price growth remaining only just outside the 3-6 per cent range, that has been prevailing for most of the past two years.”
“This pattern looks set to be maintained in the near term. Survey data point to relatively sluggish levels of new buyer enquiries, but at the same time surveyors report that relatively few properties are coming onto the market.”
He also said that while housing market developments are dependent on the UK’s broader economic performance, which slowed in the first half of 2017, “constrained supply” is likely to mean house prices continue to rise.
He expects house prices to rise by around 2 per cent over 2017 as a whole.
The report arrives a day after the accountancy firm Moore Stephens found that nearly a fifth of UK estate agents are at risk of going bust.
