Pick up in house price growth continued in June

UK house prices increased by 0.3% in June and were 1.9% higher than June 2012 according to latest data from Nationwide.

The typical UK home is now worth £168,941 whilst the southern regions of England, especially London, continued to record stronger rates of house price growth.

Commenting on the figures, Robert Gardner, Nationwide’s Chief Economist, said:

“UK house price growth continued to gather momentum in June, rising by 0.3% over the month. Indeed, the annual rate of house price growth increased to 1.9% in June – the fastest pace since September 2010.

“A number of factors are likely to be contributing to the recent acceleration. Demand for homes has been supported by further modest gains in employment, as well as an improvement in the availability and a reduction in the cost of credit, partly as a result of policy measures, such as the Funding for Lending Scheme. Signs of a modest improvement in wider economic conditions may also be playing a role in boosting buyer sentiment.

“At the same time, there are few signs that the supply of housing is improving significantly. Indeed, construction data point to a further decline in building activity in recent quarters from already depressed levels. For example, in Q1 2013 housing completions in England were down 8% compared to the same period of 2012 and around 40% below the average number of quarterly completions in 2007”.

David Pollock, Managing Director at London estate agents Greene & Co said:

“A record property price rise of 5.2% in the second quarter year on year is evidence of growing buyer confidence in the capital as the economy improves and the government’s Funding for Lending Scheme motors ahead. Prices are set to continue on their upwards trail this year as limited stock further fuels buyer competition.”

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