House prices rose in June according to the UK’s largest building society.
The latest figures from the Nationwide show house prices in the UK rose by 0.3% in June, taking the value of the average home to £168,941.
The research also shows house prices have risen by 1.9% during the last 12 months; the fastest rate of growth in over three years.
Reasons for house price growth
The Nationwide pointed to a number of reasons behind the recent surge in house prices, including:
- Increased demand for homes
- “Modest” gains in employment
- Lower interest rates
- Increased availability of mortgages
- Improved buyer “sentiment”
However, Robert Gardener, Chief Economist at the Nationwide, also issued a warning: “There are few signs that the supply of housing is improving significantly. Indeed, construction data point to a further decline in building activity in recent quarters from already depressed levels. For example, in Q1 2013 housing completions in England were down 8% compared to the same period of 2012 and around 40% below the average number of quarterly completions in 2007.”
The Nationwide was also quick to point to regional variations in the figures, with the different parts of the UK growing at widely varying rates.
Across the UK house prices are around 9% below their pre-financial crisis level. However in London, prices are at an all-time high and 5% above their pre-crisis level.
Taking the separate countries which make up the UK, England is 5% below the level seen just before the financial crisis, whilst in Wales and Scotland they are 13% and 12% lower. However, Northern Ireland, which has been affected by the housing crisis in Ireland, has seen the largest drop, with prices down a staggering 53% since 2007.