The UK housing market experienced a notable slowdown in price growth during August, according to data from Nationwide Building Society. The average price of a property in the UK is now £271,079, 2.1% higher than the same time last year. That’s a drop from the 2.4% rate of growth we experienced in July. It was the softest rate of expansion in nearly a year (since July 2022).
Robert Gardner, chief economist at Nationwide Building Society, said the annual growth rate in August stood at similar levels to June’s. This illustrates the longer-term, structural trend in our economy. He stressed that the lack of acceleration in production is a sign that deeper issues persist in our housing sector.
“House prices are still high compared to household incomes, making raising a deposit challenging for prospective buyers, especially given the intense cost of living pressures in recent years,” Gardner said.
All of Nationwide’s data comes from its own mortgage activity, so you get a real insider’s peek at trends impacting homebuyers. This brings the annual rate down to 2.1%, indicating that although prices continue to increase, the trend has definitely lost its steam.
Gardner stressed that real, systemic changes are essential to create the right conditions in the market. “It’s definitely worth looking at UK property taxes,” he stated, suggesting that reforms in this area could help facilitate more effective movement within the housing market. His comments are emblematic of a deeper anxiety growing among experts about housing affordability and the hurdles keeping would-be buyers on the fence.
The consensus among policy experts on what those reforms should look like is decidedly divided. Others call for the abolition of stamp duty altogether, claiming that it would stimulate the housing market and increase liquidity. This proposal has huge financial implications. It would bring about the loss of billions of pounds in tax revenue.