In March 2017 house prices were flat month-on-month and up by just 0.1% on a quarterly basis.
Annual house price growth has halved to 3.8% in the past 12 months, Halifax’s House Price Index has revealed.
In March 2017 house prices were flat month-on-month and up by just 0.1% on a quarterly basis.
Martin Ellis, Halifax housing economist, said: “A lengthy period of rapid house price growth has made it increasingly difficult for many to purchase a home as income growth has failed to keep up, which appears to have curbed housing demand.
“Nonetheless, the supply of both new homes and existing properties available for sale remains low. This, together with historically very low mortgage rates, is likely to support house price levels over the coming months.”
The subdued growth garnered a mixed response from the industry.
Jeremy Leaf, North London estate agent and former RICS chairman, said: “It is not very good news.
“House prices should still be rising more rapidly bearing in mind the low volume of transactions and shortage of stock. “
But Russell Quirk, chief executive of eMoov, reckoned an ‘adjustment’ isn’t surprising considering the rapid levels of growth in a past couple of years.
He said: “The market had shown positive signs out of the blocks for 2017 but it would seem these green shoots of upward property price growth have stalled in the early springtime frost of Article 50.
“The triggering of Article 50 may lead to some further uncertainty in the market as once again UK buyers let the dust settle before committing to a property sale.”
Andrew McPhillips, Yorkshire Building Society’s chief economist, reckoned a lack of affordability is starting to bite, and this process is likely to continue.
He said: “The continued strong growth of house prices in relation to household incomes has worsened affordability for many first-time buyers and home-owners, as the property market becomes increasingly dislocated from the rest of the UK’s economy.
“Affordability is likely to worsen as higher inflation hits household finances, as households will have smaller amounts of disposable income and are likely to be even less inclined to commit to an expensive house move.”
But Rob Weaver, director of investments at Property Partner, doesn’t think too much should be read into the slowdown.
He said: “The rate of annual growth is definitely slowing which we have said for a long time is a good thing. Albeit this month it is little lower than we might have expected; this is definitely not setting off alarm bells.
“I would be surprised if this can be attributed to Article 50. Brexit is potentially one of many factors contributing to a slowdown along with tighter lending criteria and stamp duty but it is a slowdown in the rate of growth; not a fall in house prices.
“Indices are only a guide to directions in the market and tend to be more volatile in the short term so we should not read too much into this.”
Tarlochan Garcha, chief executive at peer-to-peer property lender, Kuflink, said: “Now Article 50 has been triggered, the Spring season will be crucial in setting the tone for the year, as we enter peak buying season.
“For now, there's every reason to feel cautiously optimistic about 2017."
