House price growth in Mid­lands out­paces UK

Birmingham Post - - BUSINESS - Vicky Shaw Spe­cial Cor­re­spon­dent

THE West Mid­lands wit­nessed the strong­est house price growth among the English re­gions, with prices up 4.9 per cent year-on-year to reach £184,727 on aver­age out­per­form­ing the rest of the coun­try.

On aver­age, an­nual house price growth across the UK fell to a sev­en­month low in March amid sub­dued con­sumer con­fi­dence, ac­cord­ing to an in­dex.

Across the UK, aver­age val­ues in­creased by 2.1 per cent year-onyear in March, mark­ing the weak­est an­nual growth seen since Au­gust 2017.

On a monthly ba­sis, prices dipped for the sec­ond month in a row.

A 0.2 per cent month-on-month de­crease in March came after a 0.4 per cent fall in Fe­bru­ary. The aver­age UK house price in March stood at £211,625.

Robert Gard­ner, Na­tion­wide’s chief econ­o­mist, said: “On the sur­face, the rel­a­tively sub­dued pace of house price growth ap­pears at odds with re­cent healthy rates of em­ploy­ment growth, a mod­est pick-up in wage growth and his­tor­i­cally low bor­row­ing costs. How­ever, con­sumer con­fi­dence has re­mained sub­dued, due to the on­go­ing squeeze on house­hold fi­nances as wage growth con­tin­ues to lag be­hind in­creases in the cost of liv­ing.

“Look­ing ahead, much will de­pend on how broader eco­nomic con­di­tions evolve, es­pe­cially in the labour mar­ket, but also with re­spect to in­ter­est rates.”

He added: “Over­all, we ex­pect house prices to be broadly flat, with a mar­ginal gain of around 1 per cent over the course of 2018.”

In Lon­don, aver­age house prices were down 1 per cent an­nu­ally, stand­ing at £473,776, mak­ing it the weak­est-per­form­ing part of the UK for an­nual house price growth.

The next weak­est growth was in Scot­land, where prices were 0.2 per cent higher than a year ear­lier, stand­ing at £144,250 on aver­age in the first quar­ter of 2018.

Mr Gard­ner said: “Over the past two years the south­ern English re­gions have seen a steady de­cel­er­a­tion in price growth, which is now run­ning at its slow­est pace since 2012.

“By con­trast, the North­ern English re­gions have recorded a grad­ual ac­cel­er­a­tion and recorded their strong­est growth rate since 2014 in the first three months of this year.”

But he said these trends had so far nar­rowed the North-South di­vide only slightly.

He added: “A typ­i­cal house in the North of Eng­land now costs £163,138, com­pared to £331,047 in the South.”

Sa­muel Tombs, chief UK econ­o­mist at Pan­theon Macroe­co­nomics, said Na­tion­wide’s fig­ures pro­vide “more ev­i­dence that even the rel­a­tively mod­est in­crease in mort­gage rates seen over the last six months has hit the mar­ket hard”.

Mr Tombs said: “Record high loan-to-in­come ra­tios mean that home buy­ers will have to put a much larger share of their in­comes to­wards loan pay­ments merely to take out mort­gages of the same size as those who have just bought a home.

“As a re­sult, the scope for fur­ther in­creases in house prices driven by ris­ing lever­age is ex­tremely lim­ited.”

Con­sumer con­fi­dence has re­mained sub­dued, due to the on­go­ing squeeze on house­hold fi­nances Robert Gard­ner, Na­tion­wide

> The av­er­age house price across the UK in March stood at £211,625

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