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House price growth remains in double digits despite August slowdown

Annual UK house price growth slowed to 10.0% in August, from 11.0% in July, remaining in double digits for the tenth month in a row, according to the latest Nationwide house price index.

Despite increasing interest rates and the cost of living crisis, August remained an incredibly busy month for London’s property market. The number of buyer enquiries alone has risen by 35% compared to August last year.

“One driving force behind the demand for homes is the return of professionals who are looking for a property closer to work. London is the business epicentre of the world and a third of businesses are now based in or around the capital. One in three jobs is created in London meaning demand for housing will always remain strong. We are witnessing this at our Canary Wharf and Hyde Park branches in particular but also across some of London’s commuter hotspots such as Islington.

“London’s housing market is underpinned by a chronic shortage of property and an increasing population which has surpassed the nine million mark. To house this amount of people, the capital only has 3.6million dwellings which cannot change by much as there is limited land to build on. The population however will continue to grow and boost demand further.”

Rose Lyle, director of private clients at property consultants INHOUS, says:

“As prices continue to rise, there remains strong demand for good family houses with decent gardens in school catchment areas in prime and outer prime London in particular.

“Escalating inflationary pressures will inevitably have a negative impact on affordability particularly for the middle and lower end of the housing market. However, the prime and super prime market are likely to be more resilient as cash-rich buyers look to invest their money into property when other asset classes show weaker performance. Ninety per cent of our transactions so far this quarter have been cash buyers who appreciate that, with inflation where it is, leaving their money in a bank account does not make sense.”

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