The UK saw its first house price fall since August last month, with a small 0.3% dip on average property prices in the month to February according to Nationwide’s house price index, but the building society is not too pessimistic about the future.
While the month-on-month figure was 0.3% down compared to January, annual house price growth was at 2.2%, which is a fall from January’s higher than expected figure of 3.3% annual growth. The average property in the UK is now worth £210,402 according to Nationwide, compared to £211,756 last month.
Predictions from Nationwide are that UK house prices will see an overall rise of 1% to 1.5% over the course of 2018 and 2019, with the hardest times set to be seen in the next few months due to in part to Brexit uncertainty, as well as the flattening of the London housing market.
Robert Gardner, chief economist at Nationwide, said:
“Retail sales were relatively soft over the Christmas period and at the start of the new year, as were key measures of consumer confidence, as the squeeze on household incomes continued to take its toll.”
He added: “Subdued economic activity and the ongoing squeeze on household budgets is likely to exert a modest drag on housing market activity and house price growth.”
Not a crash
However, with unemployment rates and interest rates remaining low – even with the possibility of rate rises later in the year – as well as the level of demand continuing to exceed the amount of properties available in many areas, the slowdown in the housing market is only expected to be relatively modest.
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Mortgage products are still wide-ranging and competitive in the current climate as lenders continue to offer good deals, and with the stamp duty cut for first-time buyers helping many more people onto the property ladder, the market is still active.
Sam Mitchell, chief executive of online estate agents HouseSimple.com, said: “House prices have gone off the boil, particularly in London, and activity remains subdued as we approach the crucial spring period. Buyers are viewing but are not showing any urgency to offer.
“The housing market isn’t about to suffer a full blown crash, but we have some tough months ahead and a lot of hard negotiating between buyers and sellers if the market is to get back on track.”
