Annual UK house price growth slowed to 10 per cent in August, from 11 per cent in July – and the average home has increased in value by almost £50,000 in the past two years.

The figures come from the latest Nationwide house price index which shows prices up 0.8 per cent in the past month, after taking account of seasonal effects.

“While annual house price growth softened in August, it remained in double digits for the tenth month in a row [and] … the thirteenth successive monthly increase. Indeed, in the past two years, the average house price has increased by almost £50,000” says Robert Gardner, Nationwide’s chief economist.

He continues: “There are signs that the housing market is losing some momentum, with surveyors reporting fewer new buyer enquiries in recent months and the number of mortgage approvals for house purchases falling below pre-pandemic levels. 

“However, the slowdown to date has been modest, and combined with a shortage of stock on the market, has meant that price growth has remained firm.

“We expect the market to slow further as pressure on household budgets intensifies in the coming quarters, with inflation set remain in double digits into next year. 

“Moreover, the Bank of England is widely expected to continue raising interest rates, which will also exert a cooling impact on the market if this feeds through to mortgage rates, which have already increased noticeably in recent months.”

Nationwide has also completed an analysis of the new energy bill price cap increase and how this will affect household budgets. Gardner explains: “As things stand, from October, average bills for Energy Performance Certificate D-rated properties (the most common type) are set to rise by just over £1,250 a year, even after taking account of the government’s £400 discount.

“Those in properties rated A to C will see average bills increase by nearly £1,000 a year (or over £80 per month). E-rated properties will see an increase of over £1,700 per year (c. £150 per month), whilst those in the least energy efficient properties (F/G) face a staggering £2,700 rise (£225 per month).

“While only a small proportion of the stock is rated F/G (approximately two per cent of those with mortgages), the challenges for these households appear particularly acute.

“Overall, the average increase is equivalent to a 1.36 per cent rise in interest rates, but around 1% for A to C-rated properties, two per cent for an E-rated property and nearly three per cent for an F/G-rated property.”