Annual house price growth has remained soft in March, according to the Nationwide's House Price Index, signalling low buyer confidence in the wake of the continuing Brexit chaos.
Commenting on the figures, Robert Gardner, Nationwide's chief economist, says, 'UK house price growth remained subdued in March, with prices just 0.7 per cent higher than the same month last year. Indicators of housing market activity, such as the number of property transactions and the number of mortgages approved for house purchase, have remained broadly stable in recent months, even though survey data suggests that sentiment has softened. Measures of consumer confidence weakened around the turn of the year and surveyors report that new buyer enquiries have continued to decline, falling to their lowest level since 2008 in February.'
While the number of properties coming onto the market has also slowed, this doesn’t appear to have been enough to prevent a modest shift in the balance of demand and supply in favour of buyers in recent months.
'Northern Ireland remained the strongest performing home nation in Q1, although annual price growth softened to 3.3 per cent, from 5.8 per cent last quarter. Scotland saw a slight pick up in annual price growth to 2.4 per cent, while Wales saw a marked slowing in growth to 0.9 per cent (from 4 per cent last quarter). Meanwhile, England recorded its first annual price fall since 2012, with prices down 0.7 per cent compared with Q1 2018, driven by declines in the South East of England.' (See chart below.)
'London was the weakest performing region in Q1, with prices 3.8 per cent lower than the same period of 2018 – the fastest pace of decline since 2009 and the seventh consecutive quarter in which prices have declined in the capital,' continues Gardner. 'This trend is not entirely unexpected, however, as it follows several years of sustained outperformance which left affordability more stretched. Policy changes that have impacted the buy to let market in recent years are also likely to have exerted more of a drag in London, given that the private rental sector accounts for a larger proportion of the housing stock in the capital than elsewhere in the country.
'More widely, prices across the South of England (and to a lesser extent in the Midlands) are also well above pre-financial crisis peaks, while those in Northern England, Wales and Scotland are still close to 2007 levels. However, prices in Northern Ireland are still more than 35 per cent below the all-time highs recorded in 2007.' (See map below.)