The mortgage lender charted a 0.7% rise in the average cost of a home between May and June alone – hitting £245,432 and marking an increase of almost 5% during the second quarter of the year.<\/p>\n
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The report said there remained “significant momentum” in the market because of national government tax breaks aimed at supporting activity, including a stamp duty holiday in England and Northern Ireland, combined with weak supply of homes for sale.<\/p>\n
Record low interest rates have also contributed to the frenzy though experts say first-time buyers were still finding deposits a real barrier despite government help and the increased availability of mortgages with low deposit demands.<\/p>\n
Nationwide warned that prices were now close to a record high relative to average incomes.<\/p>\n
Its chief economist, Robert Gardner, said: “This is important because it makes it even harder for prospective first time buyers to raise a deposit.<\/p>\n
“For example, a 10% deposit is over 50% of (a) typical first time buyer’s income.<\/p>\n
“A potential buyer earning the average wage and saving 15% of take home pay would now take five years to raise a 10% deposit,” he noted.<\/p>\n
The report showed all parts of the UK saw an acceleration in annual house price growth during the three months to June.<\/p>\n
“Northern Ireland and Wales saw the largest gains, at 14% and 13.4% respectively… By contrast Scotland saw the weakest rate of annual growth, at 7.1% closely followed by London at 7.3%,” Mr Gardner said.<\/p>\n