Annual house price growth halved over last 12 months

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Annual house price growth halved over last 12 months

According to the latest figure from Halifax, the annual rate of house price growth has more than halved over the past 12 months to 3.8% – the lowest annual rate since May 2013.

Annual house price growth is below February’s 5.1% and less than half the 10.0% peak reached in March 2016.

House prices were unchanged between February and March for the second consecutive month, and rose just 0.1% in the three months to march – the lowest quarterly rate of change since October 2016.

Research released yesterday from Cebr predicts that average house price growth will slow to 4.4% in 2017, below the rate of 7.4% seen in 2016 and the slowest rate since 2013.

Martin Ellis, Halifax housing economist, responded to the figures: “House prices in the three months to March were 0.1% higher than in the previous quarter; the lowest quarterly rate of change since October 2016. The annual rate of growth fell further; to 3.8% from February’s 5.1%, the lowest rate since May 2013.

The annual rate of house price growth has more than halved over the past 12 months. A lengthy period of rapid house price growth has made it increasingly difficult for many to purchase a home as income growth has failed to keep up, which appears to have curbed housing demand.

Nonetheless, the supply of both new homes and existing properties available for sale remains low.  This, together with historically very low mortgage rates, is likely to support house price levels over the coming months.”

Russell Quirk, eMoov CEO, said: “The market had shown positive signs out of the blocks for 2017 but it would seem these green shoots of upward property price growth have stalled in the early springtime frost of Article 50. It is also important to note that some natural adjustment in price levels is no surprise given the rapid level of growth seen over the last year, driven for the large part, by a lack of housing stock to meet buyer demand.

The triggering of Article 50 may lead to some further uncertainty in the market as once again UK buyers let the dust settle before committing to a property sale. But this should soon subside and it is likely that the initial upward trend in property price growth seen at the start of the year will continue to blossom over the coming months.”

Mark Harris, chief executive of mortgage broker SPF Private Clients, had this to say: “Mortgage rates continue to stay low and competitive, which is helping support property prices to an extent. Even though Swap rates have risen on the back of higher inflation, lenders seem willing to absorb some of the higher costs of funding, at least for now, in order to compete for business. This is good news for borrowers and those remortgaging as we head into what is usually the busiest time of the year for the housing market.”

Jeremy Leaf, north London estate agent and former RICS residential chairman, commented: “Although this survey follows the pattern of other recent reports into the health of the housing market, it underlines the issue that house prices should still be rising more rapidly bearing in mind the low volume of transactions and shortage of stock. In other words, it is not very good news.

However, what we have found on the ground is that there is more of a general acceptance that prices are flattening and if people want to move, then Easter is the time to get on with it and be more realistic about making and accepting offers.”

Tarlochan Garcha, CEO at peer-to-peer property lender, Kuflink, commented: “With supply embedded at rock bottom, prices are being supported by the lack of choice and this is keeping the quarterly and annual rates of price growth moderately steady.

It is far from a seller’s market, with astute buyers winning big discounts.

The result is greater levels of month-to-month volatility and a sense of caution returning to the market, as rising consumer inflation threatens to drive up the cost of living faster than average wage rises.

The days of double-digit price rises have vanished, and while the market fundamentals are robust, price growth will be modest at best.

Now Article 50 has been triggered, the Spring season will be crucial in setting the tone for the year, as we enter peak buying season. For now, there’s every reason to feel cautiously optimistic about 2017.”