The annual rate of house price growth has more than halved over the past 12 months, figures from Halifax show.
Property prices rose 3.8 per cent year-on-year in March - down from 5.1 per cent in February and 10 per cent in March 2016, according to the latest Halifax house price index.
Quarter-on-quarter growth was just 0.1 per cent - the lowest quarterly rate of change since October 2016 (0.1 per cent), while month-on-month the rate remained unchanged.
The number of properties coming on to the market fell in February for the 12th consecutive month, while prices have continued to increase faster than incomes.
Average house prices have increased by more than total average employees’ net earnings in a third (31 per cent) of local authority districts (LADs) across the UK in the past two years, according to separate recent research by the bank.
| UK House Prices | March 2017(seasonally adjusted) |
| Annual change | 3.80% |
| Quarterly change | 0.10% |
| Monthly change | 0.00% |
| Average Price | £219,755 |
Martin Ellis, Halifax housing economist, said: “The annual rate of house price growth has more than halved over the past 12 months.
"A lengthy period of rapid house price growth has made it increasingly difficult for many to purchase a home as income growth has failed to keep up, which appears to have curbed housing demand.
“Nonetheless, the supply of both new homes and existing properties available for sale remains low. This, together with historically very low mortgage rates, is likely to support house price levels over the coming months.”
Jeremy Duncombe, director of Legal & General Mortgage Club, said the housing market is currently meeting the demands of a minority, not a majority.
He said: “Until we see the thousands of affordable homes the government has promised us, the industry will continue to out price the average homebuyer.
"It is now time for the government to start putting into action the pledges from the Housing White Paper and restructure our housing market once and for all.”
Ishaan Malhi, chief executive and founder of online mortgage broker Trussle, said: “People looking to buy their first property will be relieved by the slowdown in house price growth over the last few months, but homeownership will remain unreachable for many unless we see a more significant change.
“Recent figures from Halifax showed that a staggering one quarter of 18-34 year-olds believe they have no chance of owning a home in the future unless they inherit money.
"The government hasn't been able to facilitate the building of more homes for a decade now. It's time they looked beyond the large home builders and toward the raft of innovation coming from companies across the UK which are using technology to make the many other areas of homeownership more accessible and affordable."
simon.allin@ft.com
