ZPG PLC January 29, 2015
The property market started the year on the back foot with annual house price growth slowing for the fifth month in a row, figures showed today.
The average cost of a home increased by 6.8 per cent in the year to the end of January, according to Nationwide Building Society.
The gain was the smallest annual rise since November 2013 and was down from year-on-year growth of 7.2 per cent in December.
Robert Gardner, Nationwide's chief economist, said: "The further moderation in the pace of price growth is unsurprising, given the slowdown in housing market activity in recent months.
"The number of mortgages approved for house purchase has been around 20 per cent below the level prevailing at the start of 2014 and surveyors continue to report subdued levels of new buyer enquiries."
But he said that the reasons for the slowdown in activity were less clear, as unemployment was falling and wage growth had started to outstrip inflation for the first time since the financial crisis.
He added that although the rate at which house prices are rising was continuing to outpace income growth by a significant margin, affordability at a national level did not appear to be stretched.
The cost of servicing a typical mortgage also remains close to the long-run average as a share of take-home pay.
Despite the slowdown, prices still rose by 0.3 per cent in January, to stand at an average of £188,446 - 2.4 per cent higher than their pre-crisis peak.
Going forward, Nationwide expects the housing market to regain momentum in the coming months as the economy continues to improve.
Data from the Land Registry, also out today, showed a 0.6 per cent jump in house prices in England and Wales during December.
The increase left the average home costing £177,766, slightly below the peak of £181,138 reached in November 2007.
The market continued to show considerable regional variation, with house prices in London soaring by 1.8 per cent during the month, leaving the typical home in the capital costing £464,936 - more than double the national average.
Property values also rose by a strong 1.5 per cent in the east, while they were up 0.7 per cent and 0.6 per cent in the south east and Yorkshire and the Humber respectively.
But at the other end of the scale, prices fell by 1.6 per cent in the north west.
The average cost of a home in the region has increased by just 1.5 per cent during the past year to stand at £110,548.
Property values also dropped in the south west, falling by 0.9 per cent during the month, while they dipped by 0.7 per cent in the West Midlands and were down 0.5 per cent in the East Midlands.
On an annual basis, prices increased by 7 per cent across England and Wales as a whole, down from a rise of 7.2 per cent in November.
The figures also showed that 1,132 homes changed hands for more than £1m in October, the latest month for which figures are available, the equivalent of more than 36 properties a day.
Meanwhile, a member of the Bank of England's Monetary Policy Committee suggested interest rates could stay at their current record low for some time.
Andy Haldane, the Bank's chief economist, said the MPC was in no hurry to raise the Bank Rate, and when it did start increasing rates, rises could be as low as 0.5 per cent a year.
Speaking to the Daily Post newspaper, he added that the norm for rates could become 2 per cent to 4 per cent.
His comments are good news for homeowners, who look set to benefit from low mortgage rates for some time to come.
|
distributed by
|
