UK house prices unexpectedly dip in August - Nationwide

UK house prices unexpectedly dipped on the month in August, but rose at their fastest annual pace since December 2022, according to figures released by Nationwide on Friday.

On the month, prices were down 0.2% following a 0.3% increase in July, and versus expectations for a 0.2% rise.

On the year, house prices picked up 2.4% in August following a 2.1% gain the month before and versus expectations for a 2.9% jump. Prices are still around 3% below the all-time highs recorded in the summer of 2022, Nationwide said.

The average price of a home stood at £265,375 in August compared to £266,334 in July.

Nationwide chief economist Robert Gardner said: "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).

"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."

Ashley Webb, UK economist at Capital Economics, said: "Despite the recent falls in mortgage rates, the small fall in the Nationwide house price index in August suggests affordability constraints continue to bite.

"However, the further drop in interest swap rates over the past month suggests there is scope for mortgage rates to fall further and house price growth to accelerate early next year."