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UK house price growth slows for 7th month in a row, says Nationwide


03-29-2015

Prices rising fastest in the north of England with London market cooling and falls recorded in Wales, Scotland and West Midlands

House prices rose 0.1% in March.
House prices rose 0.1% in March. Photograph: Newscast /Alamy

UK house prices rose by 0.1% in March, according to the latest figures from Nationwide building society, but in some parts of the country prices are lower than at the start of the year.

The latest monthly snapshot of the market from the UK’s biggest building society showed the annual rate of growth softened for the seventh consecutive month, and now stands at 5.1%, against its recent peak of 11.8% in June 2014.

Nationwide said the average price of a home was now 2% above its pre-crisis peak, at £189,454. The figures are based on mortgages approved by the society, adjusted to reflect the typical home and are the first to show us what prices have been agreed in March and over the first quarter.

Separate figures from Land Registry based on sales registered in February put the average price of a home in England and Wales at £180,252, an increase of 0.5% on January’s figure and up by 6.5% on February 2014.

The society’s regional figures for the first three months of the year show that the London market has cooled, with price growth higher in other parts of the UK.

In the first quarter since the new stamp duty regime came into effect, which made purchases cheaper for the majority of buyers, prices across the UK rose by 0.6%.

The biggest increase in prices has been in the north of England, where prices have risen by 2.5% over the first quarter to an average of £125,299.

In contrast, since the start of the year, prices have dropped in the West Midlands, Wales and Scotland, by 0.1%, 0.5% and 0.6% respectively.

However, annual price growth remains highest in London, where Nationwide said a home costs 12.7% more than in the first quarter of 2014 at an average of £408,780.

The strength of the London market over the past year seems to have had a knock-on effect on towns and cities within commuting distance.

The highest annual price growth was recorded in St Albans, which is popular with commuters – prices there rose by 22% year-on-year and stand at an average of £498,957. In Reading, annual growth hit 19% with the average price at £325,176.

Oxford, which was named by Lloyds Bank on Friday as the UK’s least affordable city for homebuyers, was next on the list with price growth of 13%. The average cost of a property in the university city is now £407,136, Nationwide said.

Within London, the biggest increases were in the less expensive areas. In Newham, east London, Nationwide said prices were up by 29% since the first quarter of 2014, at £359,592.

Nationwide’s chief economist, Robert Gardner, said: “While house price growth has moderated across the UK, there is still significant regional variation. Prices in London and the south of England continued to see the strongest rates of annual growth, though there was a noticeable softening this quarter, particularly in London.

“Price growth also continued to cool in the north-west of England, Scotland and Wales, even though prices in these regions remain some way below their 2007 peak.”

Land Registry’s figures showed a similarly mixed picture around the regions, with several parts of England and Wales recording higher growth in February than London. While in the capital prices rose by 0.6% during the month, in the north-east they jumped by 6.2%, while in Wales they were up 4.4%.

However, at an average of £463,872 on Land Registry’s measure – which does not include newbuild homes – the cost of buying in London is still more than four times that of buying in the north-east, where the average price rose £102,061.

One of the factors driving up house prices has been a shortage of homes coming ont the market, both older and newbuild homes.

Gardner said there had not been an increase in housing supply to respond to the increase in demand since the end of the financial crisis.

“The major housebuilders appear to have capacity to expand supply, with most reporting land banks, which, at current rates of building activity, could support construction for more than five years,” he said.

“However, there is some evidence that more building is taking place in regions where affordability is more stretched.”

Housing stock increased by 2.6% in London between 2011 and 2014, he said, while in the north of England the increase was just 1.1%.

www.theguardian.com/

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