House price growth remains sluggish in March

UK house prices edged higher in March, according to Nationwide, rising by a modest 0.2% during the month as ongoing Brexit uncertainty continues to take its toll.

The average property price in the UK is £213,102, the building society said, with annual house price growth remaining subdued at 0.7%.

Robert Gardner, Nationwide’s chief economist, said: “Measures of consumer confidence weakened around the turn of the year and surveyors report that new buyer enquiries have continued to decline, falling to their lowest level since 2008 in February.

“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 demand and supply in favour of buyers in recent months.”

Northern Ireland strongest performing home nation

Northern Ireland saw the strongest annual price growth in the first three months of the year, with prices up 3.3%. In contrast, prices in England were down 0.7% compared with the same period last year.

London and the South East were the weakest performing regions between January and March, with prices in the capital 3.8% lower than in the same period of 2018. This is the seventh consecutive quarter in which prices have dropped in the capital.

Policy changes affecting the buy-to-let market such as the gradual reduction in mortgage interest relief and stricter lending criteria are likely to have exerted more of a drag in London than elsewhere, Nationwide said, as it has a bigger private rental sector than other regions.

Despite price falls, London remains the most expensive region of the UK to buy a home, with an average house price of £455,594. In the South East, prices were down 1.1% compared to the same period last year, with an average house price of £274,122.

Affordability remains flat

Housing affordability remained static in England and Wales last year, according to latest figures from the Office for National Statistics (ONS), following five years of decreasing affordability.

This should in theory be positive news for buyers, although the ONS said there are no local authority areas in which it has become more affordable to own a property.

Copeland, in the North West of England was the most affordable local authority in England and Wales in 2018; with average house prices just 2.5 times average annual earnings. The least affordable local authority was Kensington and Chelsea, with average house prices 44.5 times average annual earnings.