Values edged up 0.4 per cent from June, taking the average property price £195,621. Prices are now 3.5 per cent higher than July 2014, a faster annual increase than the 3.3 per cent recorded in June 2015.
Nonetheless, the lender’s chief economist, Robert Gardner, says that price growth could be stabilising close to the pace of earnings growth.
“This would bode well for a sustainable increase in housing market activity,” he comments.
“Employment growth has remained relatively robust in recent quarters, and, after a prolonged period of subdued growth, wage growth is also edging up. With consumer confidence buoyant and mortgage rates still close to all-time lows,
demand for housing is likely to firm up in the quarters ahead.”
The question, though, remains whether supply can keep up with demand, as the government races to stimulate building activity across the country.
“The number of new homes under construction has started to pick up, albeit from historically low levels,” notes Gardner. “Further increases are required if a sustainable recovery in the housing market is to be maintained over the longer term.”