Nationwide has reported this morning (Thursday 1 August) that house prices rose by 2.1% last month, the fastest pace since December 2022, with the average price of a house now standing at £266,334.
Nationwide, one of the biggest mortgage lenders in the UK, bases its figures on house prices on its own lending. Therefore the statistics do not include buyers who purchase homes with cash, or buy-to-let deals. Cash buyers account for about a third of housing sales.
Some people were feeling more confident about getting a mortgage as their pay packets went up, Nationwide chief economist Robert Gardner said. Part of the reason for the jump in annual price growth was weak growth at the same time last year, Mr Gardner said, although people were also feeling more confident, he continued.
Relatively large deposits are also making buying a challenge for first-time buyers, Mr Gardner said. The report highlighted that first-time buyers are spending about 37% of their take-home pay on mortgage payments. The figure is well above the long-term average of 30%.
One of the main reasons house prices are so high in the UK relative to wages is that "supply of housing has not caught up with demand for quite a while", Mr Gardner added, which has also had a knock-on impact on pushing rental prices up. Earlier this week, Angela Raynor laid out the Government’s plan to deliver 1.5 million homes over the five years, in part by overhauling the UK planning system, and letting developers build on some green belt land (parts of which will be classified as “grey belt”). Who knew the countryside was like martial arts with all the coloured belts?
Taylor Wimpey has welcomed Labour’s planning proposals as an “important early step” to delivering more homes across England, as its half-year profits fell by nearly 60%.
The UK’s second-biggest housebuilder said the new government’s proposed changes to the National Planning Policy Framework (NPPF) marked an important as the company posted pre-tax profits of just £99.7m for the six months to 30 June, down 58% from the £237.7m it posted for the same period last year.
Taylor Wimpey, commenting on the new proposals in a trading update, said: “Though we expect changes to take some time to impact, we see the planning reforms outlined by the new government as key to unlocking future years land supply and the investment in skills and resources necessary to support future housing need.” Taylor Wimpey said in its update that it expected to hit the upper end of its previous target of achieving between 9,500 and 10,000 home completions this year.
