House price growth accelerates to new high in August

House prices have leapt in August Nationwide has said. Picture: Chris Ison/PA Wire

House prices have leapt in August Nationwide has said. Picture: Chris Ison/PA Wire - Credit: PA

House prices increased by 0.6% month-on-month in August to reach a new record of more than £206,000, an index has found.

The average UK property value is now £206,145 after climbing by 5.6% annually, Nationwide Building Society said.

Despite recent reports that housing market activity has slowed, the rates of price growth accelerated in August, Nationwide said.

In July, prices increased at lower rates of 0.5% month-on-month and 5.2% annually.

Nationwide said that while buyer demand has softened, the number of new homes coming to market has also been low. This has kept the balance of demand and supply tight, which in turn has supported prices.

A Bank of England report showed this week that the number of mortgage approvals made to home buyers fell to its lowest level in a year and a half in July, in signs that the vote to leave the EU had a cooling effect on the market.

A stamp duty hike for buy-to-let investors, which came into force on April 1, has also put the brakes on some activity.

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Robert Gardner, Nationwide's chief economist, said: 'The pick-up in price growth is somewhat at odds with signs that housing market activity has slowed in recent months.

'However, the decline in demand appears to have been matched by weakness on the supply side of the market. Surveyors report that instructions to sell have also declined and the stock of properties on the market remains close to 30-year lows. This helps to explain why the pace of house price growth has remained broadly stable.'

Average house prices broke through the £200,000 barrier in March and have been steadily climbing since.