The latest House Price Index from Lender Nationwide shows that across the UK as a whole, house price growth has slowed to a five year low.
The price squeeze is being felt most keenly in the London market, where a double whammy of pre-brexit jitters and high-rate stamp duty are causing prices to decline. House prices in the Capital have shown modest year-on-year price falls in each of the last four quarters, and were down 1.9% year-on-year in Q2 2018. The price slump has to be taken in perspective – prices in the capital are still more than 50% above their 2007 peak, while prices in the UK overall are only 15% higher.
Other regions are showing modest house price growth but the pace is slowing.
Commenting on the figures, Robert Gardner, Nationwide’s Chief Economist, said:
“Annual house price growth fell to its slowest pace for five years in June. However, at 2% this was only modestly below the 2.4% recorded the previous month.
“Indeed, annual house price growth has been confined to a fairly narrow range of c2-3% over the past 12 months, suggesting little change in the balance between demand and
supply in the market over that period.
“There are few signs of an imminent change. Surveyors continue to report subdued levels of new buyer enquiries, while the supply of properties on the market remains more of
a trickle than a torrent.
“Looking further ahead, much will depend on how broader economic conditions evolve, especially in the labour market, but also with respect to interest rates.
“Subdued economic activity and ongoing pressure on household budgets is likely to continue to exert a modest drag on housing market activity and house price growth this year, though borrowing costs are likely to remain low.
“Overall, we continue to expect house prices to rise by around 1% over the course of 2018″