UK house prices edge up slightly but market stays subdued

UK house prices edged up slightly in August, but the housing market remains subdued amid ongoing economic uncertainty, according to data from Nationwide Building Society. The average property value rose by 0.2% month-on-month to £275,465, reversing a 0.1% dip in July. On an annual basis, prices grew by 1.6%, a slight improvement on July's 1.4% increase.

The modest monthly gain occurred against a backdrop of broader market weakness. Bank of England figures released on Tuesday showed mortgage approvals for house purchases fell to 56,053 in July, the lowest level since January 2024 and down from 58,215 in June. This decline underscores the challenging conditions facing buyers.

Nationwide's chief economist, Robert Gardner, attributed the subdued activity to a difficult economic environment. "Market activity and house prices have remained subdued in recent months, in part reflecting the uncertain economic backdrop," he said. A key factor is the ongoing conflict in the Middle East, which has driven up energy prices and kept market interest rates elevated. This has pushed mortgage costs higher, with the average five-year fixed rate standing at 5.63%, approximately 0.8 percentage points...