Nationwide data shows house prices fell by 0.3 per cent in February
According to mortgage lender Nationwide, the property market continued to come under pressure due to an increasingly passive economic environment and ongoing squeeze on household budgets. Moreover, uncertainties over Brexit negotiations are further credited with making future predictions concerning house prices difficult.
The average monthly house price in the UK stood at £210,402, according to Nationwide, down from £211,756 in January and up from £205,846 in February last year. While City economists expected a 2% increase, opposing market conditions resulted in average house prices falling by 0.3%, following a 0.8% increase in January.
“Month-to-month changes can be volatile, but the slowdown is consistent with signs of softening in the household sector in recent months,” said Robert Gardner, Nationwide’s chief economist. He further added that the housing markets future performance will be largely determined by broader economic health and developments in interest rates. Brexit developments, while continuing to evade accurate estimates, will however, remain a key factor.
Although Nationwide forecasted a 1% slowdown in house price growth in 2018, data from the Bank of England shed a positive light on the UK housing market. With mortgage approvals enjoying the sharpest rise in nearly three years, amounting to 67,478 in January, it easily beat forecasts of 62,000 in a Reuters’ poll of economists.
Howard Archer, chief economic adviser to the forecasting group, the EY Item Club, however warned that housing market activity tended to be erratic during the holiday season. “The stronger January Bank of England mortgage approvals data does little to dilute our belief that 2018 will be a difficult year for the housing market,” Archer said. He further predicted that slower house price growth will be a continuing trend across 2018, with price gains over the year likely to be limited to a modest 2%.