The month of July brought a slight increase in the average price of a UK house. According to Nationwide, the average cost of houses inched up 0.4% to a new high of just more than £195,600. The building society also estimated house buyers paid less tax since the change in stamp duty took affect December of last year. Collectively, they paid £275m less during the first half of the year.

House price inflation fell in June to a two year low which is possibly indicating a stabilisation is taking place, as it is more in line with earnings growth.

Robert Gardner of Nationwide commented on the latest set of data, saying: “After moderating over the past 12 months, there are tentative signs that annual house price growth may be stabilising close to the pace of earnings growth, which has historically been around 4%.”

He added: “This would bode well for a sustainable increase in housing market activity, though whether this will be maintained will depend on whether building activity can keep pace with increasing demand.”

Following the general election mortgage lending picked up and is expected to remain that way through the end of the year. Demand however is outpacing the supply number of houses available which is creating competition on the buyer side.

Gardner continued: “It remains unclear whether activity on the supply side will catch up with demand.

“The number of new homes under construction has started to pick up, albeit from historically low levels, and further increases are required if a sustainable recovery in the housing market is to be maintained over the longer term.”