Annual pace of house price growth picks up again as number of homes for sale stay at ‘desperately’ low level

News at Ware & Co | 30/04/2018

House prices picked up in April after two consecutive months of slowing growth, Nationwide claims.


The lender’s latest House Price Index puts average prices for April at £213,000, up 2.6% annually and 0.2% on a monthly basis.


Annual house price growth had been slowing since February, first dropping from to 2.2% from 3.2% in January and then hitting 2.1% in March.


The monthly growth also reversed tiny monthly drops in February and March, of 0.4% and 0.2% respectively.


Robert Gardner, chief economist for Nationwide, said:  “Looking ahead, much will depend on how broader economic conditions evolve, especially in the labour market, but also with interest rates.


“Subdued economic activity and the on-going squeeze on household budgets is likely to continue to exert a modest drag on housing market activity and house price growth this year. We continue to expect house prices to rise by around 1% over the course of 2018.”


Commenting on the figures, Nicholas Finn, executive director of Garrington Property Finders, said: “This is what the new normal looks like. After making a brittle start to the year, the property market is settling back into a period of cautious normality.


“Last year’s snap election cheated the market of its traditional post-Easter boost, but this spring we’ve seen an injection of new stock and an uptick in buyer interest.


“Of course the number of homes for sale remains at a desperately low level, but crucially the market has become free-flowing again.


“Sellers have ceased ‘kite-flying’ and the homes coming on to the market now are doing so at more realistic prices. Buyer demand is holding up well in most areas, and the net effect is to produce a market which is turning over well and nudging prices upwards.”


Meanwhile, research from Halifax suggests confidence in UK house prices remains at the lowest levels seen since 2013.


Its latest Housing Market Confidence Tracker found half of those surveyed expect house prices to rise over the next year, the same as the previous poll in autumn 2017 and remaining at the lowest level since April 2013 when it was 45%.


However fewer people now expect house price falls, with 17% predicting a fall in prices over the next year, down from 20% six months ago. Some 26% are expecting prices to stay flat.


Russell Galley, managing director of Halifax, said:  “Housing market optimism remains at a five-year low and this echoes the subdued house price performance and activity levels we have seen since the end of last year, albeit set against a positive outlook for the majority who believe house prices will increase over the next 12 months.


“Indeed, it’s encouraging to see fewer people now predicting a fall in house prices compared with six months ago. Overall, we still expect house prices to rise in line with our forecasts for the rest of the year.”