ONS Index latest to suggest house price growth is slowing

The Office for National Statistics has published its latest UK House Price Index (UK HPI), revealing that while the average UK house price continues to climb, the rate of growth has slowed.

The official headline statistics for March 2017, as released by HM Land Registry, put the average price of a UK property at £215,848.  While this shows a year-on-year increase of 4.1%, it is 1.5 percentage points lower than in the year to February.

The monthly price for a property in the UK fell by 0.6% this March, with the steepest declines seen in London and the North East, at -1.5% and -1.3% respectively.

Housing demand was ‘relatively subdued’ in March, according the Royal Institute of Chartered Surveyors’ (RICS) residential market survey, as new buyer enquiries and agreed sales were ‘broadly unchanged since the start of the year’.

The RICS also reported a fall in sales instructions as the average estate agents’ stock levels fell to a new record low, which is purportedly weighing on sales activity.

John Eastgate, Sales and Marketing Director of OneSavings Bank, commented on the ONS House Price Index figures:

“House price growth is continuing despite increasingly challenging economic conditions and stretched buyer affordability. Record-low interest rates look likely to remain, keeping mortgage costs down, but rising inflation and constrained wage growth will conspire against those still aspiring to own.”

Jeff Knight, Director of Marketing at Foundation Home Loans, said:

“With less than a month to go, attention is laser focused on the newest promises from the main political parties to tackle the continued lack of housing supply. Meanwhile, although we’ve seen a slight levelling off in price growth today – a positive in the short-term – that’s not what is happening if we look at the detail. We can expect to see an upward trend in the long-term, dangling home ownership just out of reach despite low interest rates boosting mortgage affordability.

“It really is a symptom of the fact that we simply aren’t building enough homes. That’s not to say it can’t be done, and the intent is there, but it will take a good few years for any increase in construction to support affordability. In the meantime, this demand will feed into the rental market so it’s equally important that support for this is maintained. Home ownership may still be a life goal for some, but ultimately we need to ensure there is a stable enough ‘plan B’ for those not at this stage.”  

 

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