UK house price growth was dampened in July, with a modest 0.1% increase from the previous month, as prospective buyers remained cautious regarding interest rates. Lender Nationwide reported that the average price of a home edged up to £277,542 in July, a slight rise from £277,484 in June. However, this figure remains below the average price recorded in May, which exceeded £278,000.
Annual price growth also saw a slowdown, reaching 1.8% in July, a decrease from 2.2% in June. Robert Gardner, chief economist at Nationwide, noted that geopolitical tensions, including the conflict between Iran and the US, have contributed to upward pressure on energy prices and market interest rates.
The Bank of England maintained interest rates at 3.75% on Thursday but issued a warning that a further escalation of the Iran war could push inflation above 4% next year. This could intensify cost-of-living pressures for households. Housebuilder Taylor Wimpey has also reported "challenging" market conditions, citing weaker buyer demand and rising building costs, leading to an expectation of completing fewer homes this year than initially projected.
Amy Reynolds, head of sales at Antony Roberts estate agents in London, observed that prices in their offices remain flat, with sensible offers being accepted. She noted an imbalance of more sellers than buyers, but sellers are not panicking, with initial asking prices adjusting to market levels.