Prices rose in June but a squeeze on household budgets is still likely to drag on the market in the months ahead, Nationwide says.
House prices bounced back to growth in June after three months of falls despite the “unusually uncertain” economic outlook amid Brexit talks, new figures show.
Prices rose by 1.1% month-on-month having fallen by 0.2% in May according to the latest Nationwide house price index.
The annual rate of growth was 3.1%, up from 2.1%.
But it was unclear whether the upturn was driven by strengthening demand, thanks to higher employment and low mortgage costs, or if the shortage of homes on the market was a more important factor.
Robert Gardner, Nationwide’s chief economist, warned the monthly figures could be volatile and that an emerging squeeze on household incomes did appear “to be exerting a drag on housing market activity in recent months”.
He added: “Given the ongoing uncertainties around the UK’s future trading arrangements, the economic outlook remains unusually uncertain, and housing market trends will depend crucially on developments in the wider economy.