UK house prices return to growth in August but remain subdued - Nationwide

(Sharecast News) - UK house prices returned to growth in August but remained subdued, according to figures released on Tuesday by Nationwide. House prices ticked up 0.2% on the month following a revised 0.1% decline in July. On the year, house prices rose 1.6% in August following growth of 1.4% the month before.

The average price of a home was £275,465 last month, down from £276,581 in July.

Nationwide chief economist Robert Gardner said: "Market activity and house prices have remained subdued in recent months, in part reflecting the uncertain economic backdrop. Geopolitical tensions remain high, with the conflict in the Middle East exerting upward pressure on energy prices and market interest rates.

"Market expectations of the future path of Bank Rate have been volatile. While the latest energy price shock poses inflation risks, there have been encouraging signs that it is not feeding through to underlying price pressures. Indeed, private sector wage growth has eased further in recent months, which should give policymakers breathing space to assess the extent to which tighter policy is necessary to ensure inflation returns sustainably to target.

"Underlying affordability is improving, as house price growth remains well below earnings growth. although some of these gains have been offset by higher mortgage rates. Nevertheless, this suggests that activity should regain momentum in the quarters ahead providing the energy shock wanes and confidence returns, especially if market interest rates fall back towards pre-conflict levels."