House prices rose 0.3% in June, the third month of subdued growth Nationwide has said.

House prices increased by 1% in the three months to June, compared with 1.6% to May and 2.1% in the three months to March. The annual rate of growth increased slightly to 5% in June, but only because there was a fall of 0.1% this time last year.

The price of a typical house is now £165,730, around £8,000 more than this time last year and equivalent to a rise of almost £22 per day.

Nationwide said that it expected activity to slow in June, due to the World Cup, but for the market to remain stable.

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At a glance
- House prices grew by 0.3% in June, the third month in a row of subdued growth
- Annual house price growth now at 5%
- Affordability constraints will continue to bite
- Supply constraints will continue to support house prices

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Commenting on the figures Fionnuala Earley, Nationwide’s Group Economist, said: Estate agents’ and house builders’ data record buyer and seller interest at the start of the house buying process. These show signs of more buoyant demand in May after a weak April.

This could be a response to faster house price growth through the spring, and may support further price rises in the short term. However, focus on the World Cup may mean lower activity in June which would seem more in line with house purchase approvals data from the Bank of England which has shown a softening trend.

However, while demand seems fairly stable, the deterioration in affordability and its likely impact cannot be ignored. Mortgage payments for someone on average earnings now take up around 42% of take home pay compared with around 32% three years ago. While earnings growth remains lower than house price growth the ability to pay constraint will continue to bite. So too will lending constraints in terms of income multiples and LTV limits, especially for young first-time buyers.”