The building society says house prices rose 1.3 per cent, after a rise of 1 per cent in June. While this is the third consecutive increase in the Nationwide monthly index, prices are still 6.3 per cent down annually. The average house price is £158,871 according to the index.
Nationwide chief economist Martin Gahbauer says the three-month-on-three-month rate of change, not seasonally adjusted, rose to 2.6% in July, the highest level since February 2007. He says: “This suggests there is now a reasonable chance that prices could end the year slightly higher than where they started. Only a few months ago, such an outcome would have appeared unthinkable.”
Nationwide says this increase follows other recent economic indicators and asset prices, which have also bounced back somewhat after very severe declines around the turn of the year.
Gahbauer says: “During turbulent economic times, it is not unusual for economic indicators and asset prices to overshoot in one direction and then experience a correction in the other.”
Email Mortgages chief executive Michael White says: “These figures follow the theme of recent times – small monthly increases with the fall in annual house price figures continuing to decelerate. However, the mixed picture of recent monthly rises and falls between both the Nationwide and Halifax indices is similar to those reported in the early 1990s as we negotiated the previous recession. At that time a relatively prolonged period of stagnation in the economy was the eventual outcome. Some might suggest that history could be repeating itself despite the more optimistic reports by various estate agents.”