UK house prices fall for very first time since June two thousand fifteen
H ouse prices fell in March for the very first time since mid-2015 in another sign that households are turning more cautious as the country prepares to leave the European Union.
Nationwide said that house prices declined by a monthly 0.3pc, compared with a rise of 0.6pc in February. This is the very first month-on-month dip since June 2015, when prices fell by 0.1pc.
In annual terms, prices were Trio.5pc higher, the weakest increase since August 2015.
These figures fell brief of expectations, as economists polled by Reuters had expected house prices to rise by 0.4pc in March from February and annual growth of Four.1pc.
Earlier this month, the British Bankers’ Association said that mortgage lending slowed in February, due to a combination of high house prices and feeble request from buy-to-let landlords following the tax hikes.
The average fresh loan rose to £185,800 from £180,900 a year ago.
T he softer house price data combined with the dip in mortgage approvals “fuels our belief that the housing market is being increasingly affected by the enlargening squeeze on consumers and their concerns over the outlook”, said Howard Archer, an economist with IHS Markit.
“Elevated house price-to-earnings ratios are likely to weigh down on housing market activity and house prices. However, a shortage of supply is likely to put a floor under prices.”
Russell Quirk, founder of property portal eMoov, said the figures were “certainly a consequence of a spike in the private rental sector”.
T he latest English Housing Survey from the Department for Communities and Local Government (DCLG) displayed that home ownership fell to 62.9pc in 2016, the lowest level on record since 1985.
In the 25-34 age group, just 38pc of people own their own home, while 56pc of 35- to 44-year-olds are homeowners, down from 74pc a year ago.
“Albeit the market remains healthy, which is fine news for existing homeowners, those facing the sizable task of climbing the UK ladder are opting to concede and rent,” Mr Quirk added. “Not just those at the very first rung, but seemingly the third and fourth as well.”
T heresa May, the Prime Minister, launched the two-year process of leaving the EU on Wednesday.
The fall in sterling since the referendum in June is pushing up inflation and wage growth remains sluggish, reducing the spending power of households.
Nationwide said six regions eyed the tempo of house price growth accelerate, six eyed a deceleration and one – the East Midlands – recorded the same rate as the previous quarter.
“Interestingly, the spread in the annual rate of switch inbetween the weakest and strongest performing regions was at its narrowest since one thousand nine hundred seventy eight at 6.8 percentage points – the 2nd smallest gap on record,” Nationwide economist Robert Gardner said.