Housing growth slows but affordability problems remain
Average house prices in the UK have increased by 4.1% in the year to March 2017 (down from 5.6% in the year to February 2017). This continues the general slowdown in the annual growth rate seen since mid-2016, the Office for National Statistics (ONS) said today.
The average UK house price was £216,000 in March 2017. This was £9,000 higher than in March 2016 and £1,000 lower than February 2017.
In England, house prices increased by 4.4% over the year to March 2017, with an average price of £233,000. Wales saw average house prices increase by 4.3% to stand at £148,000.
In Scotland, the typical property increased by 0.7% to reach £137,000, while in Northern Ireland an increase of 4.3% took the average price to £124,000.
On a regional basis, London continues to be the region with the highest average house price at £472,000, followed by the South East and the East of England, which stand at £312,000 and £277,000 respectively. The lowest average price continues to be in the North East at £122,000.
Jeff Knight, director of marketing at Foundation Home Loans, said the levelling off in price growth was short-term. “We can expect to see an upward trend in the long-term, dangling home ownership just out of reach despite low interest rates boosting mortgage affordability.”
He added: “It really is a symptom of the fact that we simply aren’t building enough homes. That’s not to say it can’t be done, and the intent is there, but it will take a good few years for any increase in construction to support affordability.”
Jeremy Duncombe, director, Legal & General Mortgage Club, added that the widening gap between house price inflation and wage inflation would continue to squeeze aspiring buyers.
“As the discrepancy between these two corner stones of life continue to expand, more and more first-time buyers are being completely out-priced of the home ownership market,” he said.
“With less than a month until the General Election, it is clear that housing needs to be a priority in all of the party’s manifestos. The current government has made some admirable steps forward in tackling the serious shortage of affordable homes across the UK through the Housing White Paper, but there is still a long way to go.
“As we wait for each party’s manifestos to be officially published later this week, let’s hope that housing is at the top of all of the agendas, bringing us closer to solving Britain’s housing crisis once and for all,” he added.