UK house price growth slowest in nearly four years
Although UK house prices continue to rise, the rate of growth is the lowest in almost four years. Are radical solutions necessary to solve the problem?
UK economic developments have made it difficult for many to purchase a home
Martin Ellis, Halifax housing economist, said: "Housing demand is being supported by an economy that continues to perform well with employment still expanding. Meanwhile, the supply of both new homes and existing properties available for sale remains low. This combination is pushing up prices."The annual rate of house price growth has, however, nearly halved over the past 11 months. A sustained period of house price growth in excess of pay rises has made it increasingly difficult for many to purchase a home."This development, together with signs of reduced momentum in the jobs market and squeezed consumer spending power, is expected to curb house price growth during 2017."UK housing market needs radical solutions
Rob Weaver, a member of the residential committee of the British Property Federation and director of investments at property crowdfunding platform Property Partner, said that while house price growth was no longer be in double digits, it was still climbing steadily.“Despite continuing uncertainty, a buoyant jobs market, record low interest rates and the imbalance between high demand for homes and a severe shortage in supply continue to put upward pressure on prices," he said.“But the real disappointment in today’s Halifax figures is that house-building last year fell, with a marked slowdown in new housing completions in the final quarter of 2016.“If the UK is to fix its broken housing market, it needs radical solutions. There was a lukewarm reception for the recent housing white paper - all ears will now be on tomorrow’s Budget in eager anticipation of any incentives to get Britain building affordable homes.”Related news:Mixed response to plans to fix 'broken' housing market
UK house prices in surprising February jump
London home prices now more than twice national average
Paul Goodman, chairman of the National Association of Commercial Finance Brokers (NACFB), said the Halifax data once again highlighted "a critical absence of housing supply"He added: "This is underpinned by the fact that houses simply aren't getting built in the numbers that this country desperately needs - in fact, house-building fell by one per cent last year."The current status quo, where ten of the nation's largest house-builders provide 60 per cent of homes, clearly isn't working. The communities secretary's pledge to diversify the market - incentivising smaller property developers to build - should help to redress this calamitous stock imbalance, and get the UK building the 250,000 homes it needs every year."
Demand for UK housing remains high despite Brexit
Alex Gosling, CEO of online estate agents HouseSimple.com, said that although house price growth was showing signs of slowing, the Halifax figures compared growth at the start of this year with the same period last year when the impending stamp duty changes had a "profound impact" on the market.He added: "Actually 2017 has seen a steady if unspectacular start, with activity in the market at levels we would expect to see in a normal year, which 2016 wasn't."Demand hasn't fallen away despite uncertainty around Article 50 (triggering the UK's exit from the EU), although buyers are taking their time looking before committing to a purchase. And the continued supply shortage is still playing a significant role in price stability."The general consensus is that price growth will be low digits in 2017, but the critical spring market often sets the tone for the rest of the year."House-price-to-earnings ratios make potential buyers cautious
But Jonathan Hopper, managing director of Garrington Property Finders, felt the Halifax data reflected the cautious nature of the market, with value-sensitive buyers remaining committed to moving, but only at the right price.“Although prices in the three months to February 2017 were up on the previous quarter, this comes at a somewhat steadier rate than we’ve seen recently," he said."The ongoing chronic lack of supply is a significant factor currently underpinning prices. Despite renewed focus on housebuilding by the government, there doesn’t appear to be a quick fix solution that will change the demand-supply imbalance any time soon, although tomorrow's Budget announcements may help make a step towards this.“Despite total UK home sales continuing to push up, we anticipate more sedate price growth in 2017, as rising house price-to-earnings ratios start to bite in parts of the country and restrict overall affordability."Review the latest Halifax House Price Index (7 March 2017)
For related news and features, visit our Residential Property section.Access hundreds of global services and suppliers in our Online Directory Get access to our free Global Mobility Toolkit©2024 Re:locate magazine, published by Profile Locations, Spray Hill, Hastings Road, Lamberhurst, Kent TN3 8JB. All rights reserved. This publication (or any part thereof) may not be reproduced in any form without the prior written permission of Profile Locations. Profile Locations accepts no liability for the accuracy of the contents or any opinions expressed herein.