According to ONS, the fall in house price growth accros the UK is driven mainly by a fall in the capital. There, average house prices decreased by 1.0% in the year to February 2018 - down from a 1.3% increase in January 2018.
Today's report also revealed that the average UK house price was £225,000 in February 2018. This is £9,000 higher than in February 2017 and broadly unchanged from last month.
On a regional basis, London continued to be the region with the highest average house price at £472,000, followed by the South East and the East of England, which stood at £322,000 and £288,000 respectively. The lowest average price continued to be in the North East at £128,000.
The West Midlands showed the highest annual growth, with prices increasing by 7.3% in the year to February 2018. This was followed by the East Midlands (6.3%).
The lowest annual growth was in London, where prices decreased by 1.0% over the year. This is the lowest annual growth in London since September 2009, when it was negative 3.2%. London has shown a general slowdown in its annual growth rate since mid-2016. The second-lowest annual growth was in Yorkshire and The Humber, where prices increased by 3.1% in the year to February 2018.
Russell Quirk, founder and CEO of Emoov.co.uk, commented: "It would seem that UK home seller trepidation is still impacting the market to some extent and the resulting lack of diverse housing stock on the market is ironically subduing buyer demand in the process.
That said, the slow in market conditions seem to be coming to an end and other more current industry indicators are showing that the market is returning to full health.There is still an appetite for homeownership and as we come to the end of a long tunnel of Brexit uncertainty and political instability, this hunger will only grow larger.
Unfortunately for homeowners in the capital, the tunnel is a little longer than elsewhere and while homeowners in other regions of the UK are enjoying a return to strong price growth trends, the London market remains slow out of the blocks in 2018."
Jeff Knight, Director of Marketing at Foundation Home Loans, commented: “The first quarter of the year has experienced a fall in buyer demand and some anecdotal evidence suggesting mortgage softening, mainly due to unfeasible asking prices which - even with record low interest rates – have been rising at a pace faster than earnings, particularly marginalising younger property hunters looking to get into the ownership and rental market.”
That said, activity is expected to gather pace in Q2 and we face the age-old issue of demand vs. supply. It’s paramount we make this a year of action: that the plans to meet the influx of demand are seen through and we can solve the supply issue once and for all.”
Paul Osborn, Chief Executive for Foresters Friendly Society commented: “House prices across the UK are at historic highs, preventing first time buyers from getting onto the ladder and proving tough times for sellers too. But this shouldn’t put people off saving. Whether considering a “doer-upper” or a stop-gap on the road to that dream property, ensuring your finances are working to their full potential is key.”
Starting the saving process early can often feel like an uphill battle, particularly when the cost of living seems so high. However, using specifically designed products can make a real difference. For example, the Lifetime ISA (LISA) offers those under 40 years old a very welcome 25% boost to annual saving. By identifying savings goals and using the appropriate product, that dream of getting on the housing ladder can be brought much closer.”
John Goodall, CEO and Co-Founder of buy to let specialist Landbay commented: “House prices might have slowed for a second consecutive month, but problems with affordability and supply remain. At a regional level, price rises in London continue to lag behind the likes of the East Midlands and East Anglia, a sign that demand in the capital is cooling as many buyers migrate away in search of something more affordable.
Affordability is a key concern for aspiring homeowners, especially in London where they are battling rents that are 2.5 times those across the rest of the country. When you also factor in inflationary pressures, poor saving rates and weak wage growth, saving towards a deposit on a home of their own is near impossible. That is why we need to shine a light on investment in house building, ensuring it is strategic to control house and rental price growth in regions like London where prices are simply unsustainable.”
Craig Hall, New Build Manager, Legal & General Mortgage Club, comments: “House prices may still be rising, but this more gradual rate of growth should be welcomed. More sustainable price inflation, combined with competitive mortgage rates and an extensive range of products, will help more first time buyers achieve their dream of homeownership. Schemes such as Shared Ownership and Help to Buy are also clearly helping these buyers, with research from the Home Builders Federation showing that 1 in 12 are now using these schemes to get onto the property ladder.
Whilst we’ve seen genuine commitment from the Government to address our housing crisis, more can still be done to boost housing stock. We therefore urge the Government and housebuilders to continue working together to find innovative solutions. By embracing more modern methods of construction, we can finally begin to close the gap between supply and demand.”
