- Robert Gardner, Nationwide's Chief Economist
Nationwide survey showed that U.K. house prices rose at a much faster monthly pace than projected in August, contrasting with other signs of cooling housing market. Prices rose as much as 0.8% over the month after the 0.2% increase in July. While monthly data can be volatile, the annual gauge also soared in August from 10.6% to 11%. The average house price across the U.K. is now £189,306, rising £357, or 0.8%, in just a month. This is up from the 0.2% increase in July, and marks the sixteenth consecutive monthly advance. Despite property values reaching record highs over the summer period, there have also been signs of a cool down in the housing market in recent months. Mortgage approvals fell after stricter lending rules, which force lenders to ask for more information about a mortgage applicant's spending, were introduced at the end of April, but approvals have since rebounded slightly. Nationwide said it is still unclear how much of the cooling in activity was due to the introduction of the new ‘Mortgage Market Review' rules as opposed to an underlying loss of momentum in the market.
According to a separate survey from Hometrack, the gap between house sellers' asking prices and the amount buyers are willing to pay is widening amid increasing signs the market is cooling. Hometrack said that the findings suggest that the market will see the momentum of house price growth slowing in the coming months, as opposed to prices starting to fall.
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