UK house price growth slows as investors grow more cautious

on Mar 4, 2015

Latest figures reveal that, for the sixth month in a row, UK house price growth has slowed. From January to February of this year, the rate of growth dropped from 6.8 percent to 5.7 percent according to the latest industry data.

The actual price of housing fell by 0.1 percent in February, bringing the average cost of a house to £187,964, the new figures from Nationwide reveal.
Robert Gardner, Nationwide’s chief economist, said that a slight drop in growth rate does not signal an end to healthy activity in the housing market.
“Mortgage rates remain close to all-time lows and consumer confidence remains buoyant thanks to a further steady improvement in labour market conditions,” he commented.

“Indeed, the unemployment rate has continued to decline and earnings growth has picked up, particularly in inflation adjusted terms, thanks in part to the sharp decline in energy prices,” he added.
Gardner was not discounting the lower growth rate as irrelevant however, but rather it remains to be seen if the trend will continue.
“There was a small increase in the number of mortgages approved for house purchase in December, up 2 percent from 59,000 in November to 60,300 in December, though it remains too early to determine whether this marks a turning point in activity,” he concluded.

According to Alex Gosling, chief executive of online estate agents House Simple, the housing market could merely be calming after a period of hyperinflation which saw house prices soar.
“The strong jobs market, rising real wages and cheap credit are fuelling consumer confidence, and for many renters the home owning dream remains as attractive as ever. But the fillip provided by the Stamp Duty reforms announced late last year appears to be waning, and mortgage activity is fairly subdued,” he explained.

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“Steady, not stellar, growth is likely to be the pattern for house prices in 2015. The double digit rises of 2014 are history,” he added.


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