United Kingdom house prices stall amid affordability issues

Danny Woods
May 19, 2017

Across the United Kingdom as a whole the ONS said house prices were down 0.6 per cent compared with February.

The ONS' house price index revealed that the average United Kingdom house price increased by 4.1% in the 12 months to March 2017, down from 5.6% in the year to February 2017, to hit £215,848. Lenders and surveyors blame Brexit uncertaintyThe data reflected the downward trend reported in recent surveys from lenders and surveyors, which some blamed on uncertainty caused by the Brexit vote in last year's referendum but which others suggested was simply one of affordability, with the sharp upward trend in prices seen in recent years impossible to maintain indefinitely.

The recent slowdown in house prices will be cheered by potential first-time buyers, who have seen property values rise at a much faster rate than interest on savings.

The pace of house price growth has slowed dramatically in London in the past year, highlighting a change of gear in the United Kingdom property market.

Separate figures from the ONS showed that rental prices paid by private tenants in Britain rose by 1.8% in the year to April. down from 2% in the year to March.

In the year to the end of March, house prices were up 4.1% on average across the UK.

In England, house prices have increased by 4.4% over the 12 months to March 2017, with the average price in England now at £233,000.

The lowest annual growth was in the North East, where prices decreased by 0.4% over the year, followed by London at 1.5%.

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Regionally, the East of England and the East Midlands saw the highest annual rate of growth, with prices in both locations rising by 6.7% over the period. This is the weakest figure for London since March 2012.

"These figures are consistent with the Brexit-related slowdown that we anticipated last year and our guidance of 2% to 5% growth this year".

On a regional basis, London continues to be the region with the highest average house price at £472,000, followed by the South East and the East of England, which stand at £312,000 and £277,000, respectively.

In Scotland, the slowdown in average price increase also notable, with property rising at just 0.7 per cent. The average price in Northern Ireland now stands at £124,000, an annual increase of 4.3%.

United Kingdom house prices are falling, official data confirmed on Tuesday, and are likely to continue doing as the housing market is hit by a softening consumer environment and sterling volatility that erodes the appeal for overseas investors.

This was the slowest pace of growth since October 2013 and continues a general slowdown seen since the middle of past year.

The recent easing of house price growth will continue to be welcome news to prospective homebuyers, according to Andy Sommerville, director at Search Acumen, but he insisted that the United Kingdom government can not rely on a "sluggish market" to bring this relief.

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