

Market Analysis
British house prices in July were 2.1% higher than the previous year, marking the largest annual increase since December 2022. However, they remain below the peaks reached earlier that year, according to data from Nationwide Building Society released on Thursday.
In July alone, prices increased by 0.3% to an average of £266,334 ($341,706), with both monthly and annual rises slightly exceeding economists' predictions from a Reuters poll.
This data comes just ahead of the Bank of England's August interest rate decision, which many economists predict will result in a cut from the 16-year high where rates have remained for nearly a year.
Nationwide's Chief Economist Robert Gardner noted that "Investors expect the Bank Rate to be lowered modestly... which, if correct, will help to bring down borrowing costs." However, he added that the impact would likely be limited, as the swap rates influencing fixed-rate mortgage pricing already anticipate future interest rate declines.
In July, British house prices were still 2.8% below the peak reached in the summer of 2022, Nationwide reported.
House prices had surged by 25% from the start of the COVID-19 pandemic, driven by increased demand for more spacious homes, until September 2022, when a bond market slump under then-Prime Minister Liz Truss caused a temporary mortgage finance shortage.
Since then, prices have mostly stabilized as Bank of England rates rose and remained high to combat a surge in consumer price inflation following the pandemic and Russia's invasion of Ukraine.
Nationwide, Britain's second-largest mortgage lender, highlighted that the typical monthly mortgage payment now accounts for 37% of take-home pay, significantly above the 28% seen just before the pandemic and the long-term average of about 30%.
Gardner suggested that "Affordability is likely to improve only gradually through a combination of wage growth outpacing house price growth - which is expected to remain fairly flat - with some support from modestly lower borrowing costs."
Paraphrasing text from "Reuters" all rights reserved by the original author.