The housing market has taken its foot off the accelerator with average house prices in the UK increasing by 4.1 per cent in the year to March 2017 to £215,848 (down from 5.6 per cent in the year to February 2017) and down minus 0.6 per cent over the month.
The average price of a property in the UK is now £215,848, according to Land Registry figures released today (16 May).
This continues the general slowdown in the annual growth rate seen since mid-2016, according to the Land Registry.
Even London finds itself in a position it is unaccustomed to – close to the bottom of the pile.
Shaun Church, director at Private Finance, said: “Price growth in the capital has been notably more moderate compared to the rest of the country, with annual growth standing at 1.5 per cent.
"The City of London in particular has experienced almost the worst rate of annual house price growth of all UK local authorities. Young, professional buyers in the capital will benefit from softer price rises, particularly as wage growth is expected to pick up.
“While house price growth appears to be settling into a more sedate pace compared to recent years, the stark lack of property supply remains a long-term concern. With demand for housing showing no signs of stopping, intensifying competition for homes will drive up prices in the long-term unless new properties are made available.”
Jeff Knight, director of marketing at Foundation Home Loans, agreed that although we’ve seen a slight levelling off in price growth today, we can expect to see an upward trend in the long-term, dangling home ownership just out of reach despite low interest rates boosting mortgage affordability.
Jonathan Hopper, managing director of Garrington Property Finders, was more negative on prospects.
He said: “These official figures suggest the slowdown is sharper and started earlier than first thought.
“April’s surprise election announcement applied a dab to the property market's brakes, but this data confirms it had already dropped down a gear in March.
“While the speed and severity of the fall in annual price growth – down to its lowest level for more than three years – will alarm some sellers, such national averages mask the wildly different conditions at opposite ends of the market.
“ For the housing market, the snap election has come at just the wrong time – injecting an unwelcome dose of uncertainty into an already fragile market.
“Nevertheless the lull could be short-lived. If the election delivers a clear result that puts Brexit firmly back on track, the property market could receive a huge boost, freeing up more supply and with greater levels of clarity spurring discretionary buyers into action.”
Russell Quirk, eMoov chief executive and founder, said: "The latest figures from the Land Registry seem to reflect the cooling in the market reported by other industry sources such as Nationwide and Halifax and it is only natural that a fall in mortgage approvals translates to a drop in completions.
"Whilst a market slowdown may send an air of panic across the UK property sector the reality is that this stuttering pace of price growth is more of a natural adjustment, after the very high rate of inflation witnessed over the last few years.
"Despite the current unpredictability of the UK property market, homeowners are still seeing a return on their investment on an annual basis and it is far better for the market to adjust slowly over a period of time, rather than come crashing down to earth as it did a decade ago."
stephanie.hawthorne@ft.com
