United Kingdom: House price growth weakens again in April
April 28, 2017
House prices in the United Kingdom dipped 0.4% in April compared to the previous month in seasonally adjusted terms, coming after March’s 0.3% decline, according to the Nationwide Building Society (NBS). On an annual basis, house prices rose 2.6% in April, down from March’s 3.5%, marking the slowest pace of growth in almost four years. The average house price in April was GBP 207,699 (April 2016: GBP 202,436).
The loss of momentum in the housing market is a sure sign that consumers are feeling squeezed and mirrors the evolution of other economic indicators, such as the sharp slowdown in retail sales growth observed since the start of the year. The NBS also highlighted more fundamental reasons for the slowdown, as house price growth has been outstripping wage growth for some time, eroding housing affordability, while mortgage servicing costs remain in line with their long run average. The NBS maintained its forecast for a modest rise in prices this year, as the dearth of homes on the market offsets reduced household purchasing power.
Author: Oliver Reynolds, Economist