UK house prices August 2023: good news for hopeful homeowners as house prices plummet
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It's easy and totally understandable to get bogged down with the ongoing and inherently crippling cost of living crisis, but Nationwide finally has some more good news for some people - thise who are looking to buy a home in the UK. But it's less good for those who already own their own house.
The finance organisation has published its House Price Index for August 2023 which found that house prices have continued to fall. They have dropped by 0.8% month on month and now sit 5.3% below the peak of this time last year.
According to the report, the average price of a house in the UK stands at £259,153. This is £1,675 down compared to July (£260,828).
Commenting on the House Price Index, Nationwide's chief economist Robert Gardner said: "August saw a further softening in the annual rate of house price growth to -5.3%, from -3.8% in July, the weakest rate since July 2009. Prices fell by 0.8% over the month, after taking account of seasonal effects.
“The softening is not surprising, given the extent of the rise in borrowing costs in recent months, which has resulted in activity in the housing market running well below pre-pandemic levels. For example, mortgage approvals have been around 20% below the 2019 average in recent months and mortgage application data suggests the weakness has been maintained more recently (we explore the evolving composition of transactions in more detail below).
Gardner continued: “Nevertheless, a relatively soft landing is still achievable, providing broader economic conditions evolve in line with our (and most other forecasters’) expectations. In particular, unemployment is expected to remain low (below 5%) and the vast majority of existing borrowers should be able to weather the impact of higher borrowing costs, given the high proportion on fixed rates, and where affordability testing should ensure that those needing to refinance can afford the higher payments.
“While activity is likely to remain subdued in the near term, healthy rates of nominal income growth, together with modestly lower house prices, should help to improve housing affordability over time, especially if mortgage rates moderate once Bank Rate peaks.