It is now a ‘great time’ to invest in the UK housing market despite a new report showing that house price growth continued the trend of the past few months in August with a further moderation in both the annual and quarterly rates of increase, according to Adrian Gill, executive director of estate agency at LSLi.
The annual rate of house price growth across 20 of the largest UK cities slowed to 8.2% in August, from 9.5% in July, taking the average to £239,400, according to the latest Hometrack UK Cities Index.
The slowdown in the rate of house price growth partly reflects increasing difficulties in purchasing a home as house prices continue to increase more quickly than earnings which has constrained demand.
But despite the curbing of house price growth, there are clear signs that the housing market is now settling down after the initial shock of the outcome to the referendum, supported in part by the Bank of England’s recent interest rate cut, illustrating the underlying strength of the residential property market which should stand it in good stead for the long term future.
Gill (right) said: “It’s really no surprise to see a softening in house price growth over the summer months. Nor should this easing in price inflation be considered a cause for concern. The unsustainable rate at which property values have been rising has meant that many potential homebuyers have been priced out of the market – especially in areas like London and the South East.
“The truth is, now is a great time to buy a home. The fundamentals of the housing market remain strong, with record low interest rates and lenders maintaining their appetite to lend.”
Gill wants to see more done to help tackle the “huge imbalance” between the supply and demand of properties, which will ultimately continue to place upward pressure on home prices, particularly in the medium to long term.