House price growth slowed in July offering further evidence that the market has stopped accelerating, although the annual rate of increase is still in double figures.
New monthly figures from Nationwide showed that the price of the average home increased by only 0.1 per cent in July, the slowest rate of growth since April last year and taking the annual rate from 11.8 per cent in June to 10.6 per cent last month.
Despite the average price of a property now standing at the all-time high of £188,949, a spokesman for the building society said that the pace of growth is definitely slowing, although he added that this may only be temporary.
A lot depends on the volume of homes coming onto the market, as a lack of property has helped to put upward pressure on house prices over the past year as the economic recovery has taken hold.
Meanwhile, separate reports have shown a dip in mortgage approvals following the introduction of toughened mortgage lending rules at the end of April under the Mortgage Market Review (MMR). However, the number of approvals actually edged up in June after falling for four consecutive months.
The new rules force lenders to ask people applying for a home loan more detailed questions about their spending habits, in order to work out whether they can truly afford their repayments, both now and when interest rates eventually rise.
However, June’s slight rise gives credence to the belief held by most analysts that the MMR may only prove to have had a temporary dampening effect as lenders got to grips with the changes. This would mean that prices will continue to rise, although not as fast as they have been.