UK house price growth has come to a grinding halt. Nationwide Building Society has reported that the average price of any home in the country now reaches a staggering £271,079. Chief economist Robert Gardner acknowledged, “The rate of growth in August was similar to that reported in June.” This apples-to-apples comparison reveals a dramatic chilling of the housing market.
The most recent Annual House Price Index statistics (published September 2023) show annual house price growth at 2.1% in August – a decrease from 2.4% in July. That’s the lowest growth rate, or one of the slowest growth rates, we’ve experienced in the last year. None were as severe as the slowdown the market faces now, the last comparable being July 2024. Gardner underscored that housing affordability remains a major challenge for many would-be buyers.
“House prices are still high compared to household incomes, making raising a deposit challenging for prospective buyers, especially given the intense cost of living pressures in recent years,” Gardner stated.
Data released by Nationwide Building Society comes directly from their own mortgage business, and offers an insight into the current market picture. On one hand, academia and online experts tout the accessibility of these changes. Others claim that reform to property taxation, including abolishing stamp duty, would help to kick start the housing market. The effect of that would generate billions in lost tax revenue.
Gardner makes a strong case for the UK to undertake a full review of its property tax system. He thinks it’s very important, though, to develop that framework in a way that allows for effective movement in and out of the housing market. “It’s definitely worth looking at UK property taxes,” he remarked during an interview with the BBC.
House price appreciation remains positive, albeit on a moderating trend. Even more analysts are calling on policymakers to consider how tax reforms might impact first-time buyers and the overall market before upending the status quo. It is an exciting time as the current environment brings these important questions of affordability and accessibility to the fore within the UK housing sector.
