Monthly House Price Report

Indicators suggested a slowing demand and continued tight supply. According to surveys, housing market activity has remained subdued and transaction volumes and enquiries are mostly unchanged from November 2016. Despite this, expectations are positive, but steady. New buyer enquiry figures, supported by the Bank of England, show that the volume of approvals for house purchases decreased by 5.6% compared to February 2016. The total number of seasonally adjusted property transactions completed in the UK with a value of £40,000 or above has also decreased by 1.9% compared to February 2016.

  • In February 2017, the average price of a property was £217,502.
  • The annual price change for a property was 5.8%, below the average of 7.3%.
  • The monthly price change for a property in the UK was 0.6%.
  • The monthly index figure for the UK, with January 2015 equalling 100, was 114.1. 

House Price Changes

  • Annual house price growth has remained unchanged at 3.8%.
  • House prices in the three months to April were 3.8% higher than in the same period a year ago.
  • Prices in the three months to April were 0.2% lower than in the preceding three months.

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Between March and April, house prices fell by only 0.1%, signalling virtually no change. This goes to show a stabilising housing market following a record decline after the EU referendum, according to the latest Halifax Housing Market Confidence Tracker.  The number of total UK home sales has stabilised in the early months of 2017, showing a 6% increase from the final quarter of 2016. Supply, however, remains very low, with the number of properties coming onto the market falling for the 13th month in a row in March.

The annual house price growth is at its slowest in nearly four years with the second consecutive monthly decline. Annual house price growth has dipped to 2.6%, which is in some ways a surprise considering a high employment rate and a resurging confidence in the industry. The dip may be due to the housing industry starting to feel the squeeze on real incomes or pressure across the sector. With a slow growth in retail and other industries, this phenomenon may be due to a broader trend rather than one contained in the housing sector alone. This may also be due to house price growth outstripping earnings growth, as it has done for a sustained period of time, meaning people cannot afford as easily to make a housing purchase. Though retail and housing has slowed, other big ticket items such as cars are remaining robust, and net wealth has remained high overall. It may be too soon to count out the British consumer just yet.

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Mortgage Lending

The Council of Mortgage Lenders estimates that gross mortgage lending reached £21.4 billion in March. This is 19% higher than February’s lending total of £17.9 billion, and 19% lower than the £26.3 billion lent in March 2016. With the second property stamp duty deadline coming into effect at the start of April, this sharp fall was expected due to the rise in borrower’s activity. Gross mortgage lending for the first quarter of 2017 was an estimated £59.1 billion, a 6% decrease on the £63.0 billion lent during the same period last year, and a 4% decrease on the fourth quarter of 2016. CML senior economist Mohammed Jamei said “Mortgage lending appears to be in neutral gear. Our gross estimate for March is £21.4 billion and this is broadly in line with average monthly lending over the past year.” It is expected that the lending industry will continue in this way over the short term as low mortgage rates encourage first time buyers, along with useful government schemes.

Property Prices on the Market

  • The price of property coming to market has risen for the fifth consecutive month, up by 1.2%.
  • This makes an increase of £3,626 on average and a new record in property prices.
  • Typical family homes have seen the biggest rise, with a recorded year-on-year jump of 5.4%.

Home owners with young children are keeping the market flowing, as new Rightmove research shows they are twice as likely as the average person to be moving home. Moving pressures have taken priority over concerns over Brexit or the General Election, which have failed to knock market momentum with year-to-date sales agreed to be 2% higher than the previous election year of 2015. Founder and CEO of eMoov.co.uk, Russell Quirk, commented “Overall, the predominant air of confidence seen in the market over the last year from UK home sellers seems to be persisting and this, in turn, should see price growth stabilise.”

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