Britain: Annual House Prices Decline
A new report shows that the annual growth in home prices for the UK was at 0.7% at the end of March with month on month increases up little at 0.2%. The average home price is now at £213,102 for the nation.
Home price declines in London and the South East of England saw its first annual price fall since 2012 at 0.7% in a analysis by Nationwide.
London came in as the weakest performing region for the first quarter with house prices seeing a decline of 3.8% than at the same time for 2018 making seven straight quarters of house price declines.
Director of Benham and Reeves, Marc von Grundherr in PropertyWire:
‘Home owners are now some £20,000 worse off than they were this time last year.'
For those looking to London as an investment the current climate provides an excellent opportunity to not only secure a good deal, but to see a return over the coming years and, while domestic home buyers sit on their hands, there continues to be a consistent level of interest from overseas despite the war waged on the buy to let market.'
Market activity in housing for transactions and mortgage approvals have remained steady this year with Robert Gardner of Nationwide commenting in PropertyWire:
‘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 also stated that Northern Ireland remained the best performing market for the first three months of 2019 though price growth had slipped to an annual 3.3% from the last quarter of 2018 when the growth registered 5.8%.
Scotland saw a small increase in annual house prices with growth at 2.4% and Wales showing a decline to 0.9% from 4% in the previous quarter.
‘This trend is not entirely unexpected, however, as it follows several years of sustained outperformance which left affordability more stretched. Policy changes that have impacted the buy to let market in recent years are also likely to have exerted more of a drag in London, given that the private rental sector accounts for a larger proportion of the housing stock in the capital than elsewhere in the country.'
‘More widely, prices across the South of England, and to a lesser extent in the Midlands, are also well above pre-financial crisis peaks, while those in Northern England, Wales and Scotland are still close to 2007 levels. However, prices in Northern Ireland are still more than 35% below the all-time highs recorded in 2007.’
And with the constant uncertainty over Brexit the effect on home prices is certainly possible to cause some decreases.
Guy Gittins, managing director of Chestertons:
‘Over the medium and long term, London property has outperformed most other asset classes and we believe it will remain a solid investment, regardless of the Brexit outcome.’
Sam Mitchell, chief executive officer of online estate agents Housesimple expects home prices to remain slow in growth:
‘This is likely to be the pattern for the foreseeable future, until the European Union situation is resolved at least, as the impact of protracted Brexit negotiations drags more heavily on the London market.’
‘The market would have preferred a decision one way or the other. Instead, we are now in this state of short term limbo leaving many buyers and sellers unsure what to do. Normally, we would expect to see a spike in transaction levels around this time as we enter the traditional Spring bounce period, but with the extension to the EU leaving date, the bounce is likely to be a little subdued this year.‘
'Saying that, savvy sellers could see this as a short window of opportunity to steal a march on the competition, as more homeowners choose to wait and see what happens with Brexit negotiations in the next few weeks before marketing.'