JP Morgan says the UK housing market is showing early signs of price softening, even as transaction volumes return to growth.
In its August UK Housing Pulse, compiled with its European banks and internet research teams, the bank highlighted diverging price measures. Nationwide’s index showed a 0.6% month-on-month rise, while Rightmove reported a 1.2% fall.
The Royal Institution of Chartered Surveyors’ price balance also pointed to weakness, dropping to -13 in July from -7 in June.
Housing transactions rose 2% year on year in June, reversing a 12% drop in May.
The report also tracks mortgage rates, affordability, housing supply and build cost inflation, offering a monthly snapshot of the sector’s momentum.
Earlier this week, the builders themselves provided a mixed picture.
Bellway PLC's (LSE:BWY) were the model of solidity, leading to modest upgrades in the wake of its trading update. After an initial spike, the stock ended the week around 1% lower.
Larger rival Persimmon PLC (LSE:PSN) was largely to blame for this after its interims contained a downgrade to next year's outlook.
The shares were off 4%, dragging the sector with it.