UK houses prices largely unchanged in August - ONS

(Sharecast News) - House prices were largely unchanged in August, official data showed on Wednesday, as higher mortgage rates continued to dampen demand. According to the Office for National Statistics' seasonally-adjusted UK house price index, average prices increased by just 0.2% in the 12 months to August, to £291,000, That compares to a 0.7% uptick in July.

The growth was the lowest annual rate in just over 11 years, although it was also marginally above consensus expectations of 0.0%.

Month-on-month, prices rose 0.3% in August.

Gabriella Dickins, senior UK economist at Pantheon Macroeconomics, said: "Elevated mortgage rates continued to weigh on house prices in August.

"The seasonally-adjusted index...probably will start to fall again over the coming months, as it is based on completed transactions, which depend on mortgage offers made several months ago.

"As a result, the adverse impact of the further rise in mortgage rates during the early summer has not fully emerged in the official data yet.

"Next year, however, we think house prices will start to rise again. Households' real disposable income should continue to rise as wage growth continues to outpace CPI inflation, which the recent recovery in consumer confidence suggests households will be more willing to make large financial commitments soon."

Separate ONS data, also released on Wednesday, showed that private rents rose 5.7% in the 12 months to September, up from 5.6% in August, the fastest annual rate since the data series began in January 2016.

The ONS house price index is calculated using data from HM Land Registry, Registers of Scotland and Land and Property Services Northern Ireland.