House prices in the UK rose 10% through August, according to Nationwide, despite pressure on buyers’ budgets.
The market still has greater demand from buyers than homes for sale, resulting in a double-digit annual increase for the 10th straight month.
The mortgage lender said the typical property price has risen by £50,000 to £273,751 over the past two years.
However, according to Nationwide, there were signs of a slowdown in the market as both energy costs and mortgage rates rise.
Annual home price growth has slowed slightly over the past month, from 11% in July, but the market remains difficult for first-time buyers.
“Rapidly increasing rents offer no relief and may keep some buyers searching for their home longer than they would like,” said Myron Jobson, senior personal finance analyst at Interactive Investor.
“Although the housing market is slowing down, it is far from a crash. Strong housing demand, far exceeding the available housing stock, means the housing market remains difficult for would-be homeowners and those looking to climb the real estate ladder.”
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The Nationwide predicts that rising energy costs and rising mortgage rates will put more pressure on household budgets in the coming months.
It suggested bills for the least energy efficient property could typically increase by £2,700 a year, or £225 a month.
“There are signs that the housing market is losing some of its momentum,” said Robert Gardner, Nationwide’s chief economist.
“We expect the market to continue to slow as pressure on household budgets mounts in the coming quarters and inflation is expected to stay in double digits into next year.
“In addition, the Bank of England is widely expected to continue raising interest rates, which will also have a cooling effect on the market if this feeds through to mortgage rates, which have already risen significantly in recent months.”
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