According to Nationwide’s monthly house price survey, released today, house prices rose by 0.8% in August, well above the 0.2% rise in July and the 0.1% expected by economists polled by Reuters. The building society said that although the 12-month increase of 11% was still down from June’s 11.8%, house price growth ‘continues to outpace earnings by a significant margin’.
Modestly surprising house price inflation – so far, so clear. But it seems property analysts Hometrack beg to differ. Their survey, also released today, says that house prices rose by exactly the 0.1% economists expected.
Hometrack said London prices were slowing the most, with only 11% of postcodes in the capital seeing rises this month, compared to 19% for the rest of the country and 87% for London back in the boom days of February. The analysts also pointed to the rising gap between asking prices and sale prices (now at 95.9% of the asking price compared to 96.8% in May) as evidence of a cool down.
The discrepancy may well be a result of the wide variance between local property markets, which makes obtaining a representative sample tricky, or the difference in methodologies between the two: Nationwide bases its results on its own lending data, while Hometrack's are based on a survey of 5,000 agents and surveyors.
Either way, it adds to the difficulty of figuring out what exactly happening to the value of Britain’s homes. Mortgage approvals were down before May but then they were up again in June, buying enquiries were down but now recovery-driven consumer confidence is up, and interest rates are down but could go up. As Nationwide Chief Economist Robert Gardner said, ‘the outlook for the housing market remains highly uncertain’. You can say that again.