House price growth in the UK remained subdued in June, up 0.5% compared with the same month in 2018, and up just 0.2% month on month to an average of £216,515, the latest lender index shows.
The index report from lender the Nationwide says that new buyer enquiries and consumer confidence in the housing market was also subdued. But Robert Gardner, Nationwide’s chief economist, pointed out that indicators of housing market activity, such as the number of mortgages approved for house purchase, have remained broadly stable.
‘Housing market trends are likely to continue to mirror developments in the broader economy. While healthy labour market conditions and low borrowing costs will provide underlying support, uncertainty is likely to continue to act as a drag on sentiment and activity, with price growth and transaction levels remaining close to current levels over the coming months,’ he said.
A breakdown of the data shows that Northern Ireland remained the strongest performing nation in the second quarter of 2019 with annual price growth rising to 5.2%, from 3.3% in the previous quarter. Wales also saw a pick up to 4.2%, from 0.9%.
Price growth in Scotland was more subdued, at just 0.4% year on year and England remained the weakest performing home nation, with prices essentially flat compared with a year ago.
Looking across England, the Outer Metropolitan was the weakest performing region in the three months to June, closely followed by the Outer South East, with annual price declines of 1.8% and 1.6% respectively.
Prices also fell in London for the eighth quarter in a row, though the annual pace of decline moderated to 0.7%, from 3.8% in the first quarter. Moreover, prices in the capital are still only around 5% below the all-time highs recorded in the first quarter of 2017 and around 50% above their 2007 levels. By comparison, UK prices are only around 17% higher over the same period.
Elsewhere in England, annual price growth remained relatively modest in the second quarter with Yorkshire and Humberside the best performing region with a 3% rise year on year. House price growth across Northern England. The North, North West, Yorkshire and Humberside, the East Midlands and the West Midlands averaged 2.1%, remaining ahead of that in the South with London, Outer Metropolitan, Outer South East and East Anglia recording a 0.7% fall.
‘These trends are not entirely unexpected, however, as they follow several years of sustained outperformance in London and the south, which left affordability more stretched in these areas,’ Gardner said.
Kevin Roberts, director of the Legal & General Mortgage Club, pointed out that slower house price growth and the current low interest environment has encouraged many prospective buyers to make their first step onto or up the property ladder. ‘Increased competition from lenders has also driven mortgage rates down, helping many to secure finance,’ he said.
According to Sam Mitchell, chief executive officer of online estate agent Housesimple, the resilience of the housing market in the face of Brexit uncertainty is ‘remarkable’ and a reflection of the underlying more favourable economic factors like low unemployment and low interest rates.
‘Importantly, these latest figures indicate that the North/South divide is becoming ever more stark. While London and the South East are being hit by political uncertainty and a punitive stamp duty regime for second home ownership, Northern regions are experiencing consistent growth. At Housesimple, we’re also seeing markets in the North, where affordability looks to be more reasonable, continue to perform well with plenty of buyers and sellers active,’ he explained.
The second half of the year is likely to see continued steady but slow growth, according to Mike Scott, chief property analyst at estate agent Yopa. ‘London and especially South East England may still have further to fall, but unless the wider economy takes a turn for the worse there is little risk of any significant house price falls outside the overheated South East corner of the country,’ he said.
https://www.propertywire.com/news/uk/price-growth-and-activity-in-the-uk-property-market-remains-subdued-says-latest-index/
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