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March HPI shows subdued market

The latest House Price Index has been released showing that, while house prices are continuing to rise at a steady rate, the overall market is generally subdued.
Overall the UK annual house price growth remained steady at 2.1%, with London once again the weakest performing region, showing house prices are down one per cent year-on-year.
Average house prices now come in at £211,625.
Commenting on the figures, Robert Gardner, Nationwide’s Chief Economist, said: “UK house price growth remained broadly stable in March at 2.1%, little changed from the 2.2% recorded the previous month. House prices fell by 0.2% over the month, after taking account of seasonal factors.
“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. Subdued economic activity and the ongoing squeeze on household budgets is likely to continue to exert a modest drag on housing market activity and house price growth this year.
“But historically low unemployment and mortgage interest rates together with the lack of properties on the market is likely to provide some support for house prices. Overall, we expect house prices to be broadly flat, with a marginal gain of around 1% over the course of 2018.”
Taking the figures on a regional basis, we can see that Northern Ireland is leading the rate of growth, with a substantial increase of 7.9%. However, these figures are still below the pre-crisis levels.
Wales is also enjoying a pick up, with a 6.1% year-on-year increase, the highest since 2014. While England growth of 1.9%. Only Scotland saw weaker price growth than England, with prices up just 0.2%.
With London house prices dropping, the North-South divide is beginning to narrow, for the fourth consecutive quarter, regions in the North of England recorded stronger annual house price growth than those in the South. Although, prices in the North of England are, on average, still less than half of those prevailing in the South, with typical northern house costing £163,138, compared to £331,047 in the South.
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