The latest Nationwide house price index for March has revealed that house prices across the country remain relatively stable despite a small slowdown in growth, but the north-south divide is having a bigger effect.
Property prices across the UK grew by an average of 2.1% in March compared to the same month the previous year, a small decrease from February’s 2.2% rise – and the smallest increase seen since August 2017. However, the change represents only a very small adjustment in the housing market as a whole, indicating that despite the current political climate, the sector remains relatively buoyant, with low unemployment levels and fewer properties on the market supporting house prices.
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The difference in performance between London and parts of the north has also had an impact on the final figures, as the capital was the weakest performing region in March’s figures with a 1% decrease in house prices annually – the only region to see a fall. House prices in London are still the highest in the country, at around £331,047 according to Nationwide, but the number of homeowners there has fallen from 57% 10 years ago to 47% today.
Jonathan Hopper, managing director of Garrington Property Finders, said: “London’s property market shows no sign of giving up its wooden spoon, as the slowdown in the capital worsens.
“What began as a cooling of prices in the capital’s prime and super-prime postcodes is turning into an ever more widespread frost.”
Strong house price growth in the north and Midlands supports market
By contrast, for the fourth consecutive quarter, regions in the north of England have seen higher average property price growth than regions in the south. The West Midlands enjoyed the largest annual change in the first three months of the year, of 4.9%, followed by the East Midlands with 4.5%.
The north-west also recorded strong house price growth of 3.2% in the first quarter of the year compared to the same period last year, while London has seen an overall 1% decrease in the same period.
Brian Murphy, head of lending for Mortgage Advice Bureau, believes that the current north-south divide in house price performance is no surprise.
He said: “Market conditions in London and the south-east would appear to be somewhat lacklustre when compared to other areas.
“This proves that consumer confidence is still very strong outside of the capital and its commuter belt, as underscored by the ongoing paucity of stock in these areas.”
Robert Gardner, Nationwide’s chief economist, commented: “Looking ahead, much will depend on how broader economic conditions evolve, especially in the labour market, but also with respect to interest rates. Overall, we expect house prices to be broadly flat, with a marginal gain of around 1% over the course of 2018.”