British house prices increased in July at the slowest monthly pace in a year, according to a report from mortgage lender Nationwide today.
Although house prices, which rose for a 12th consecutive month in July, were 0.1% higher (month-on-month) than in June when they rose by 0.2%.
Annual price growth jumped to 11% - to an average house cost of £271,209 - slightly up from the 10.7% in the previous month.
Nationwide added that the market is likely to slow further as the cost-of-living squeeze tightens and as the Bank of England keeps on raising interest rates.
Robert Gardner, Nationwide's chief economist, insisted the housing market had been surprisingly buoyant so far, given the squeezed budgets and plummeting record-low consumer confidence.
"We continue to expect the market to slow as pressure on household budgets intensifies in the coming quarters, with inflation set to reach double digits towards the end of the year," Gardner said.
Martin Beck, chief economic advisor to the EY ITEM Club, cautioned that in the longer term “it’s hard to see how house price rises will avoid anything but a significant slowdown – but this would be a slowdown, not a contraction.”
“Previous significant corrections in values have tended to coincide with steep rises in unemployment, increasing the number of ‘forced’ sales.”
“But the backdrop this time looks far more benign.”