House prices fall in England for first time since 2012
England recorded its first annual price fall since 2012, down 0.7% compared with the first quarter of 2018. Nationwide noted that this trend has largely been driven by declines in the South East of England.
London was the weakest performing region during the first quarter. Nationwide’s House Price Index recorded a 3.8% drop in prices to £455,594, compared to the same period in 2018. This is the fastest pace of decline since 2009 and the seventh consecutive quarter in which prices have declined in the capital.
On a monthly basis, house prices across the UK rose modestly by 0.2%, after taking seasonal factors into account. Average house price slightly increased to £213,102 in March, compared to £211,304 in February.
Growth in Scotland and Northern Ireland
Northern Ireland remained the strongest performing nation during the first quarter, although annual price growth softened to 3.3% standing at an average of £142,484. This compares to an average price rise of 5.8% last quarter.
Meanwhile, Scotland saw a slight pick-up in annual price growth to 2.4%, with an average price of £147,728, while Wales saw a marked slowdown in growth to 0.9% from 4.0% last quarter, with the average house priced at £153,287.
Robert Gardner, Nationwide’s chief economist, said key indicators within the housing market activity, such as the number of property transactions and the number of mortgages approved for house purchase, have remained broadly stable in recent months, even though survey data suggests that sentiment has softened.
“Measures of consumer confidence weakened around the turn of the year and surveyors report that new buyer enquiries have continued to decline, falling to their lowest level since 2008 in February.
“While the number of properties coming onto the market has also slowed, this doesn’t appear to have been enough to prevent a modest shift in the balance of demand and supply in favour of buyers in recent months,” he explained.
Although a slowdown in prices and low interest rates are tempting some first-time buyers into the market, low levels of supply remains a problem for those further up the chain, Craig McKinlay, new business director of Kensington Mortgages, warned.
“What is needed are measures from the government to address this long-running problem. Incentives for older homeowners to downsize such as an exemption from stamp duty, for example, would be a great first step.
“Policies are needed to free up existing supply as well as promote the building of all types of tenure,” McKinlay said.
Jeff Knight, marketing director for Foundation Home Loans, said: “Whether buyers decide to stick to their wait and see approach or shrug off economic concerns altogether, it’s crucial both the supply of new property offerings is as consistent as rental accommodation for those who aren’t yet ready to commit to ownership.”