MortgagesApr 28 2017

House price growth slowest in nearly four years

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House price growth slowest in nearly four years

House prices recorded their second consecutive monthly fall in April, while the annual rate of growth slowed to 2.5 per cent, the weakest since June 2013.

Even though house price growth has softened, activity has remained broadly stable, with mortgage approvals for house purchase fairly steady at a respectable 68,000 per month, a little above the average prevailing in recent years.

Commenting on the figures, Robert Gardner, Nationwide’s chief economist, said: “In some respects, the softening in house price growth is surprising because the unemployment rate is near to a 40-year low, confidence is still relatively high and mortgage rates have fallen to new all-time lows in recent months.

“While monthly figures can be volatile, the recent softening in price growth may be a further indication that households are starting to react to the emerging squeeze on real incomes or to affordability pressures in key parts of the country.”

Alex Gosling, CEO of online estate agents HouseSimple.com, said it was "widely predicted" this would be a difficult year for property.

"If we were seeing a house price growth soften during a traditionally quiet period for buying and selling then this could be overlooked, but we are now bang smack in the middle of the Spring market when we expect to see activity pick up.

"We do have to remember though that the market has faced the invoking of Article 50 and now a snap General Election. People's buying and selling decisions are underpinned by confidence, and at the moment they are facing a huge amount of uncertainty with is inevitably going to dent confidence.

"There's every chance the market will cool further in May as buyers and sellers hold off making a decision until after June 8. But then it's very likely we will see a late Spring bounce after the election result, which unless Labour pull off the steal of the century will see Conservatives remain in power. That should provide a timely boost of confidence to the housing market.

"We need to remember that two months of negative price growth doesn't constitute a property crash. A lack of supply is still supporting prices and mortgage rates remain extremely low. This feels like the property market has hit a minor bump in the road, not driven off a cliff."