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House price ‘worst three-month run’ since 2009

Business & Economy 02 Jun 2017
House price ‘worst three-month run’ since 2009

UK house prices in worst three-month run since 2009, Nationwide figures show

Analysts say it's too early to know if the slowdown is "a blip" or a reflection of the impact of the squeeze on household budgets.

Image: Nationwide's figures show the average house price in the UK is currently around £208,711

Growth in house prices is down for the third consecutive month for the first time since 2009, new figures reveal.

The annual rate of growth has also slowed to 2.1%, the weakest in almost four years, according to figures released by Britain's biggest building society Nationwide.

The data showed this was a drop from April's 2.6% – while on a monthly basis, prices across the country fell by 0.2%, following on from dips of 0.3% and 0.4% in March and April, respectively.

The figures showed the average house price in the UK is currently around £208,711.

Robert Gardner, Nationwide's chief economist, said it was too early to say whether the slowdown was "merely a blip, a reflection of the impact of the squeeze on household budgets, or is due to mounting affordability pressures in key areas of the country".

He said: "It is still early days, but this provides further evidence that the housing market is losing momentum.

"Moreover, this may be indicative of a wider slowdown in the household sector," he said, adding that it was unlikely to be linked to the upcoming General Election.

"In our view, household spending is likely to slow in the quarters ahead, along with the wider economy, as rising inflation increases the squeeze on household budgets. This, together with mounting housing affordability pressures, is likely to exert a drag on activity and house price growth in the quarters ahead," he said.

"However, the subdued level of building activity and the shortage of properties on the market are likely to provide support for prices.

"As a result, we continue to believe that a small increase in house prices of around 2% is likely over the course of 2017 as a whole," he added.

Earlier this week, the Bank of England showed mortgage approvals for home buyers fell to a seven-month low in April, in a further sign that the housing market may be slowing.

The National Association of Estate Agents said buyers and sellers were taking a "wait and see" ahead of next week's vote.

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