Monthly, house prices fell by 0.2% cancelling out a rise of 0.2% in May which Nationwide said maintained the gradual downward trend which had been seen since the middle of 2014.
Robert Gardner, Nationwide’s chief economist, said despite the slowdown house prices were still growing quicker than wages.
“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% in the three months to April from 1.9% at the start of the year,” said Gardner.
London was the top performing English region but Northern Ireland took poll position as the best performing UK region annually in quarter two (Q2).
Northern Ireland saw 8% annual house price growth in Q2 compared to 5.7% year-on-year growth in Q1. London’s annual house price growth pace cooled from 12.7% in Q1 to 7.3% in Q2. Wales and Scotland both experienced a decline in property prices year-on-year with a 0.8% and 1% dip respectively.
The London the average property price is now £429,000 compared to £144,000 in Wales and £140,500 in Scotland.
Paul Smith, chief executive of Haart Estate Agents, said the slowdown was a step in the right direction for affordability but demand was still outpacing supply.
“Our data shows there are now 11 prospective buyers chasing each new property instruction across the UK, compared to eight at the same time three years ago. The formation of property chains is still proving difficult. While many are keen to move, and would do so if the opportunity presented itself, the difficulty is in securing an onward purchase.”
Smith said congestion in the property chain was having a stagnating effect creating a ‘desperate’ need for a more liquid market through an injection of supply.
“We are hearing reports from branches that downsizing has become a dirty word and is seen as carrying negative connotations – that the seller has somehow lost their zest for life,” said Smith. “Changing this attitude to release more family homes for second steppers would ensure our limited housing stock is used in the most efficient way. Without this healthy churn in the market, first-time buyers will continue to be priced out.”
