Average house price rises to £211,671 as property market growth continues
House prices are predicted to grow by around 2% across 2017, according to a report showing that property values continued to head upwards in July.
Across the UK, the average house price reached £211,671 in July - a new record for Nationwide Building Society's index.
Property values increased by 0.3% month on month and by 2.9% annually. A year earlier, in July 2016, annual house price growth was running at a stronger pace of 5.2%.
Robert Gardner, Nationwide's chief economist, said a lack of homes for sale is helping to support house price growth - although he also said it could become more of a buyers' market in the coming months.
He said prices are expected to rise by around 2% over 2017 as a whole - "only modestly lower than the levels recorded in recent months".
Mr Gardner said: "A lack of homes on the market appears to be providing support, with annual house price growth remaining only just outside the 3%-6% range, that has been prevailing for most of the past two years.
"This pattern looks set to be maintained in the near term. Survey data point to relatively sluggish levels of new buyer inquiries, but at the same time surveyors report that relatively few properties are coming on to the market."
Mr Gardner said ultimately housing market developments will depend on wider economic performance.
He said: "While employment growth has remained relatively robust, household budgets are coming under pressure as wage growth is failing to keep up with the rising cost of living.
"This suggests that housing market activity is likely to remain subdued, with the balance in the market shifting a little further towards buyers in the quarters ahead."
Jeremy Leaf, a north London estate agent and a former residential chairman of the Royal Institution of Chartered Surveyors (Rics), said: "Fortunately there does seem an enthusiasm among serious buyers and sellers to get on with the job in hand.
"The current climate is also providing an opportunity for first-time buyers at least to better compete for smaller properties."