New record as house prices soar

ANNUAL house price growth accelerated in July as the average property value hit a new record high of £217,010, according to an index.

Across the UK, house prices were up by 2.5% annually in July, compared with a 2% annual increase in June, Nationwide Building Society said.

House prices increased by 0.6% month on month in July – the second month of increases in a row following a 0.7% upturn in June.

Nationwide said the 0.25 percentage point rise was likely to have only a modest immediate impact on borrowers, many of whom are locked into fixed-rate deals.

Robert Gardner, Nationwide’s chief economist, said: “While the impact for most borrowers is likely to be modest, it’s important to note that household budgets have been under pressure for some time because wages have not been rising as fast as the cost of living.

“Indeed, in real terms (after adjusting for inflation) wage rates are still at levels prevailing in 2005.”