Annual house price growth has slowed to its lowest level since mid-2013 making property a little bit more affordable this month - but this isn't set to last.
Nationwide figures released today showed house prices rose 3.2 per cent in the year to August, down from a 3.5 per cent increase a month earlier. On a monthly basis they rose 0.3 per cent, compared with a 0.4 per cent increase in July.
British workers experienced decidedly lacklustre wage growth in the years after the financial crisis, but pay packets have staged a turnaround over the past few months. Meanwhile, the widening gap between supply and demand has sent property prices soaring, and while the growth rate has cooled somewhat recently, analysts warned this could be temporary.
"This month’s data provides further evidence that annual house price growth may be stabilising close to the pace of earnings growth, which has historically been around four per cent," Robert Gardner, Nationwide's chief economist, said.
"However, survey evidence cautions that this trend may not be maintained unless construction activity accelerates."
"A softening in the market with the slowest growth in two years is very possibly a result of the super buoyant prices we had one to two years ago," Rob Weaver, director of Property Partner, said.
"But with a combination of an historic lack of properties coming onto the market and continued shortage in the supply of new homes, house prices can really only go one way in the medium to long term: up."