House prices are up 2.4% compared to this time last year, according to Nationwide, the fastest rate of annual growth seen since December 2022.
However, the monthly rate of house price growth remained largely static between July and August at -0.2%. The average price of a UK property currently stands at £265,375 in August, the building society’s latest House Price Index shows, down from £266,334 last month.
Robert Gardner, Nationwide’s chief economist, said: “While house price growth and activity remain subdued by historic standards, they nevertheless present a picture of resilience in the context of the higher interest rate environment and where house prices remain high relative to average earnings (which makes raising a deposit more challenging).
“Providing the economy continues to recover steadily, as we expect, housing market activity is likely to strengthen gradually as affordability constraints ease through a combination of modestly lower interest rates and earnings outpacing house price growth.”
Buyers pay a premium for energy efficient homes
Homebuyers are prepared to pay a premium for properties with a higher energy performance rating, Nationwide’s analysis shows.
The building society found that more energy efficient properties, rated A or B, attract a small premium of 2.8% compared to a similar property rated D (the most commonly occurring rating). However, there is barely any difference in the prices paid for properties with an energy performance rating of C or E compared with those with a D rating.
An F or G rated home, however, is valued 4.2% lower than a similar D rated property.
The research shows that energy efficiency impacts have increased relative to pre-pandemic levels, with A/B properties now attracting a larger premium compared with 2019 and F/G properties seeing a larger discount. The report concluded “The value that people attach to energy efficiency is likely to continue to evolve, especially if the government takes measures to incentivize greater energy efficiency to help ensure the UK meets its climate change obligations.”
Nearly half of England’s housing stock is now rated C or higher, up from 18% in 2012, with 97% of newly built properties having a rating of C or above.
