Positive economic data is providing a post-Brexit rally for housebuilders following a rise in house prices and improved consumer confidence.
House prices are up 0.6% in August despite softer new buyer enquiries and an 18-month low of approved mortgages in July, which was blamed on new stamp duty rules and uncertainty following the referendum.
Annual house price growth is up from 5.2% in July to 5.6% this month.
Nationwide chief economist Robert Gardner says: ‘The pick-up in growth is somewhat at odds with signs that housing market activity has slowed in recent months.
‘However, the decline in demand appears to have been matched by weakness on the supply side of the market.
‘What happens next on the demand side will be determined, to a large extent, by the outlook for the labour market and confidence amongst prospective buyers.’
Nationwide is optimistic about lower interest rates as this will provide an immediate benefit to many mortgage borrowers and indirect support to the housing market.
Consumers are also brushing off post-Brexit blues after the GfK Consumer Confidence index revealed a reading of -7 in August, which is higher than -12 in July.
GfK market dynamics head Joe Staton says: ‘We’re reporting some recovery in the index this month as consumers settle into the new wait-and-see reality of a post-Brexit, pre-exit UK.
‘The uptick in confidence is driven by good news from hard data, the combination of historic low interest rates matched with falling prices and high levels of employment.’