House prices dipped 0.2 per cent in May and annual growth once again slowed as the market continues to cool.
According to the Nationwide, the average house price fell from £195,166 in May to £195,055 in June.
While prices were up 3.6 per cent year-on-year, annual growth slowed for the second consecutive month from 4.6 per cent in May.
Nationwide chief economist Robert Gardner says: “The annual pace of house price growth continued to slow in June, moderating to 3.3 per cent from 4.6 per cent in May. This maintains the gradual downward trend that has been in evidence since mid-2014, though this is the smallest annual rate of increase for two years.
“House price growth continues to outpace earnings, but the gap is closing, helped by a pickup in annual wage growth, which moved up to 2.7 per cent in the three months to April from 1.9 per cent at the start of the year.”
Publishing separate research showing regional house prices in the second quarter, Nationwide says Northern Ireland led the way with 8 per cent year-on-year growth, followed by London at 7.3 per cent. However, annual growth in the capital fell significantly from 12.3 per cent the month before.
Wales and Scotland were the only two regions where prices fell in Q2, dropping by 0.8 per cent and 1 per cent respectively.
Dragonfly Property Finance chief executive Jonathan Samuels says the ”property market is a veritable conundrum”.
He adds: “While the gap between earnings and house price growth may be narrowing, you suspect there will always be a degree of repulsion between the two, like two positive magnets. Wages may be improving but it’s hard to see them ever getting consistently close to house prices.
“London prices may have softened quite considerably but they are still comfortably above the UK regional average. Even when London falls, the landing is relatively soft.
“The fact that Northern Ireland outperformed all other regions in the second quarter highlights the way in which different regions can wax and wane.
“It’s hard to predict where the property market is headed. With a low cost of living, very competitive mortgage rates, renewed political certainty and a strong jobs market, there are many positives. However, should events in Greece spiral out of control, the UK property market will not be immune.”