Nationwide Building Society has reported a modest slowing down in the annual UK average house price growth. And most regions have also experienced a slight slowing down in annual growth during the second quarter of 2022, including Wales.
For the UK as a whole, June saw house prices grow by 10.7% year-on-year compared to 11.2% the previous month. Although this house price figure indicates a possible slowing of house price increases, the company states that growth is still in double figures, with the average house price in the UK now £271,613, an increase of over £26,000 in the past year.
Robert Gardner, Nationwide's chief economist, says: "There are tentative signs of a slowdown, with the number of mortgages approved for house purchases falling back towards pre-pandemic levels in April and surveyors reporting some softening in new buyer enquiries.
"Nevertheless, the housing market has retained a surprising amount of momentum given the mounting pressure on household budgets from high inflation, which has already driven consumer confidence to a record low."
Gardner puts this down mainly to the current strength of the labour market, where the number of job vacancies has exceeded the number of unemployed people in recent months and unemployment, at least for now, remains close to 50-year lows.
He says: "At the same time, the stock of homes on the market has remained low, which has helped to keep upward pressure on house prices. The market is expected to slow further as pressure on household finances intensifies in the coming quarters, with inflation expected to reach double digits towards the end of the year.
"Moreover, the Bank of England is widely expected to raise interest rates further, which will also exert a cooling impact on the market if this feeds through to mortgage rates."
Looking at the data for the four nations, Wales still leads the way as the nation with the highest annual year-on-year increase, but when the data is broken down into regions, Wales is not the top hotspot. The regional data released by Nationwide suggests Wales has been overtaken by the south west region as the area with the highest average house price increase.
According to the latest Office for National Statistics (ONS) data covering the period to April 2022, Wales still leads the way for the highest house price increases as a region, find out more about that here. But Nationwide's latest figures, which are reported quarterly suggest another region has seen the highest increases.
Robert Gardner says: "“Our regional house price indices are produced quarterly with data for quarter two, the three months to June, showing a softening in annual house price growth in nine of the UK's 13 regions.
"The South West overtook Wales as the strongest performing region in Q2, with house prices up 14.7% year-on-year, a slight increase from the previous quarter. This was closely followed by East Anglia, where annual price growth remained at 14.2%.
"Wales saw a slowing in annual price growth to 13.4%, from 15.3% in the first quarter. Price growth in Northern Ireland was similar to last quarter at 11.0%. Meanwhile, Scotland saw a 9.5% year-on-year rise in house prices."
Although Nationwide's figures suggest a possible slowing of the increases during the last two years, the UK and Wales' average house price at £271,613 and £208,309 are still at a record high.
Brean Horne, personal finance expert at NerdWallet, says: "These are uncertain times for homeowners and homebuyers alike. Despite predictions of the market cooling, it’s not going to happen overnight. This will come as a blow to those hoping to take their first step onto the property ladder."
She says first-time buyers are facing a triple-threat of interest rates rising, increasing inflation and house prices still at record levels.
Brean says: " These factors will affect the amount they can borrow; inflation has risen above 9% and could reach as high as 14% later this year, impacting the amount they can save; and if house prices also climb further, many properties will simply be out of reach." And don't miss the latest property prices, best dream homes in Wales, renovation stories and interiors, join the Amazing Welsh Homes newsletter which is sent to your inbox twice a week.
READ NEXT:
The secluded old station house transformed into dream home hiding in the countryside
Rare chance to buy a bungalow that's up for sale in one of Wales' most sought-after coastal streets
One county in Wales continues to be one of the UK's hottest property areas
