The annual rate of UK house price growth has picked up in August to its fastest pace since December 2022, even though there was a month-on-month dip in residential property values, a key survey reveals.
Annual house price growth in August is 2.4%, up from 2.1% in July, in spite of a 0.2% month-on-month fall on a seasonally adjusted basis.
The average house price in August is £265,375, according to the survey from building society Nationwide.
Analysis by Nationwide has concluded that energy efficiency is becoming more important in influencing what buyers will pay for a home.
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Nationwide chief economist Robert Gardner said: “UK house prices fell by 0.2% month on month in August, after taking account of seasonal effects, but the annual rate of house price growth continued to edge higher. Average prices were up 2.4% year on year, a slight pick-up from the 2.1% recorded in July and the fastest pace since December 2022 (2.8%). However, prices are still around 3% below the all-time highs recorded in the summer of 2022.”
He added: “While house price growth and activity remain subdued by historic standards, they nevertheless present a picture of resilience in the context of the higher interest rate environment and where house prices remain high relative to average earnings, which makes raising a deposit more challenging.
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“Providing the economy continues to recover steadily, as we expect, housing market activity is likely to strengthen gradually as affordability constraints ease through a combination of modestly lower interest rates and earnings outpacing house price growth.”
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Nationwide has used its house price data to “examine the extent to which owner-occupiers pay a premium or discount for a home due to its energy performance rating”.
Referring to energy performance certificates, it said: “Our analysis suggests that a more energy-efficient property, rated A or B, attracts a modest premium of 2.8% compared to a similar property rated D, the most commonly occurring rating. There is little difference for properties rated C or E, compared with D.”
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