2018.06.2705:42:00UTC+00UK House Price Growth At 5-Year Low: Nationwide

UK house prices increased at the slowest pace in five years in June on squeezed household budgets and Brexit uncertainty, data from the Nationwide Building Society showed Wednesday.

House prices grew 2 percent year-on-year in June, following May's 2.4 percent rise. This was the weakest growth since 2013. Nonetheless, the pace of increase was faster than the 1.7 percent economists had expected.

On a monthly basis, house prices rebounded 0.5 percent after falling 0.2 percent in May. Economists had forecast a 0.2 percent rise for June. Average house prices totaled GBP 215,444 in June.

Looking forward, much will depend on how broader economic conditions evolve, especially in the labor market, but also with respect to interest rates, Robert Gardner, Nationwide's chief economist, said.

"Subdued economic activity and ongoing pressure on household budgets is likely to continue to exert a modest drag on housing market activity and house price growth this year, though borrowing costs are likely to remain low," Gardner added.

The economist forecast house prices to rise by around 1 percent over the course of 2018.

Data showed that house prices climbed 2.2 percent on a yearly basis in the second quarter. London was the weakest performing region in the second quarter, with prices down 1.9 percent year-on-year.

Despite the recent underperformance, prices in the capital were more than 50 percent above their 2007 peak.

Meanwhile, the East Midlands was the strongest performing region, with prices up 4.4 percent year-on-year.