UK House Price Growth Remained Weak in April

Data from the Nationwide House Price Index reveals that UK house price growth remained weak in April, with a monthly change of +0.4% and an annual change of +0.9%.

The April Index rose to 428.8 from 427.2 in March and the average house price reached £241,920.

Commenting on the figures, Robert Gardner, Nationwide's Chief Economist, said: 

“UK house price growth remained subdued in April, with prices just 0.9% higher than the same month last year. “Indicators of 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 remained subdued.

“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 supply and demand in favour of buyers in recent months. April marks the fifth month in a row in which annual house price growth has been below 1%."

First Time Buyer Numbers Recovering

“While the ongoing economic uncertainties have clearly been weighing on consumer sentiment, this hasn’t prevented further steady gains in the number of first time buyers entering the housing market in recent quarters.

“Indeed, the number of mortgages being taken out by first time buyers has continued to approach pre-financial crisis levels in recent months"

“First time buyer numbers have been supported by the strength of labour market conditions, with employment rising at a healthy rate, and earnings growth slowly gathering momentum.

"While house prices remain high relative to average earnings, low mortgage rates have helped to support mortgage affordability. Indeed, raising a deposit appears to be the major barrier for prospective first time buyers, since the cost of servicing the typical mortgage remains in line with or below long-run averages as a share of take home pay in most regions of the UK.

Comment

Managing Director of One77 Mortgages, Alastair McKee, commented: 

“While annual house price growth remains below one per cent for the fifth month in a row there has been positive movement in the rate of growth so far this year, and it’s likely that we will see an end to this negative trend come May’s index.

Despite the large financial barriers, it's buyer and seller indecision that continues to stifle the wider market rather than the initial cost of buying. However, it is extremely encouraging to see the charge against this being led by the affordability of mortgage products and our first-time buyers, in particular.”

Director of Benham and Reeves, Marc von Grundherr, commented:

“Given the previous years of outstanding house price growth, we could be forgiven for thinking that anything below the one per cent mark where the annual rate is concerned, is entering life support territory.  

This simply isn’t the case and while the rate of price growth has paused for breath, it remains within easy reach of wider targets for the year as we enter just the second quarter.  

Without the sufficient market fuel of buyer demand and replenished stock levels the market may struggle to make it out of second gear, however, it’s likely that we will see conditions accelerate through the spring and summer seasons with some more positive growth levels registered despite the continued uncertainty of Brexit.”  

If information like this is of interest to you please take a look at our Economic Data page which includes a summary of all of the key UK economic indicators that you may need to know for your business.

Source : Insight DIY Team and Nationwide

For all the very latest news and intelligence on the UK's largest home improvement and garden retailers, sign up for the Insight DIY weekly newsletter.