House price growth in Midlands outpaces UK
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