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Growth of house prices has slowed down


04-31-2016

 

March data from the Land Registry shows house prices in March 2016 have fallen 0.5% since February, but the year-on-year increase is still 6.7%.

Growth of house price inflation has slowed according to the latest data, but this may be only a temporary blip.

March data from the Land Registry shows house prices in March 2016 have fallen 0.5% since February, but the year-on-year increase is still 6.7%.

This takes the average property value in England and Wales to 189,901 and the average price in the South West to 197,085. Average prices in Bristol, however, are way ahead, at more than 253,000.


On a regional level, London and the East experienced the only monthly growth in house prices, each with an increase of 0.2%. Prices in the South West dropped by -0.9% in March, compared to February, but were still 5.8% above February 2015 levels.

Repossessions were down across the board in the UK by a minimum of 33% (in the North East) and a maximum of 72% (London). In the South West, the figures halved from 42 in January 2015 to 21 a year later.
 
Figures for April from Nationwide (compiled from mortgage data) conclude that UK house prices edged up 0.2% during the month and the annual rate of house price growth moderated to 4.9% from 5.7% in March.

Robert Gardner, Nationwide's Chief Economist, explained: "This slowdown returns the annual pace of house price growth to the fairly narrow range between 3% and 5% that had been prevailing since the summer of 2015.

"It may be that the surge in house purchase activity resulting from the increase in stamp duty on second homes from April 1 provided a temporary boost to prices in March.

"However, it is possible that the recent pattern of strong employment growth, rising real earnings, low borrowing costs and constrained supply will tilt the demand/supply balance in favour of sellers and exert upward pressure on price growth once again in the quarters ahead.

"There was a surge in the number of residential property transactions in March (which includes mortgaged and cash purchases) ahead of the introduction of the additional stamp duty levy on second properties.

"There were 165,400 transactions in March, an all-time high, some c11% higher than the previous peak of c149,000 recorded in January 2007."

"Estimates from the Council of Mortgage Lenders suggests that mortgage lending also rose sharply, to almost 26bn in March, up 43% from the 18bn recorded in February. If confirmed by Bank of England data later this week, this would suggest a strong outcome, up nearly 60% year-on-year, although still well below the all-time high of 34.9bn recorded in June 2007.

"The increase in mortgage lending is likely to have been driven by a sharp increase in buy-to-let (BTL) investors bringing forward their purchases before the stamp duty changes took effect.

"House purchase activity is likely to fall in the months ahead given the number of purchasers that brought forward transactions. The recovery thereafter may also be fairly gradual, especially in the BTL sector, where a wealth of other policy changes, such as the reduction in tax relief for landlords from 2017 are likely to exert an ongoing drag.

"Moreover, there is a risk that the surge in house purchases in recent months will exacerbate the shortage of homes on the market according to RICS the number of properties on estate agents' books was already close to all-time lows on data extending back to the late 1970s."

www.bristolpost.co.uk/

 

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