The latest figures from the Nationwide Building Society show that house prices began to slow down in August as further evidence of a wider cooling trend along with the economy as a whole.
Nationwide reported that the annual fall in house prices showed a decline for 2.9% in July to 2.1% in August, – that’s a month-by-month basis fall of O.l%, which compares to a growth of 0.2% in July.
The Nationwide report also showed that revenues from stamp duty had reached an all-time high of £12.8bn in the year to June, and increase to Government coffers of over £2bn over and above the previous high of £10.6bn reached in 2007.
Robert Gardner, Nationwide’s chief economist, told the Daily Telegraph that growing pressure on household budgets has weakened consumer sentiment, this he said is despite the un-employment rate falling to its lowest level for more than 40 years.
“Ultimately, housing market developments will depend on wider economic performance.
“The UK economy slowed noticeably in the first half of the year, and there has been little to suggest a significant rebound in the months ahead. While employment growth has remained robust, household budgets are under pressure. This suggests that housing market activity will remain subdued,” said Mr Gardner
The fall is also reflected in a decline in the number of mortgage approvals, falling to a nine-month low and with chartered surveyors also reporting a slowdown in inquiries from new buyers.
Chief property economist at Capital Economics Ed Stansfield, told the Daily Telegraph:
“We suspect the already high level of prices is also weighing on demand, as growing numbers of households find themselves priced out. We expect the economy to strengthen a little in the second half of the year. But it is less clear that, as rate rises move back on the agenda, lenders will reverse their recent, more cautious approach.”