UK house prices rose more than expected in August as a shortage of properties for sale helped stave off the impact of the cost of living crisis.
(Bloomberg) —
UK house prices rose more than expected in August as a shortage of properties for sale helped stave off the impact of the cost of living crisis.
Nationwide Building Society said the average cost of a home rose 0.8% in August to £273,751 ($317,000), the 13th consecutive monthly increase. Yet the annual pace of gains slowed, a trend that Nationwide warned was likely to continue as pressure on household budgets intensify.
Nationwide warned that the slowdown was likely as inflation eats into the spending power of consumers and the cost of servicing mortgages surges with interest rates.
“Moreover, the Bank of England is widely expected to continue raising interest rates, which will also exert a cooling impact on the market if this feeds through to mortgage rates, which have already increased noticeably in recent months,” said Nationwide Chief Economist Robert Gardner.
Mortgage rates are now at their highest since 2016 after six interest-rate increases from the Bank of England since December, weighing on the affordability of property.
Consumers are also grappling with the strongest inflation in 40 years and an 80% increase in electricity and natural gas bills due to hit in October.
More stories like this are available on bloomberg.com
©2022 Bloomberg L.P.
