UK house prices fall
UK house prices fell in January amid Brexit concerns and lack of affordability in some parts of the country.
House prices fell 2.9% in January from December and the annual growth rate slowed sharply, according to one of Britain’s biggest mortgage lenders.
The value of a typical home dropped to £223,691, Halifax figures show. It is the biggest monthly drop since April 2018 when prices declined 3.1%. However, monthly house price changes tend to be volatile. Just the previous month (December) there was a 2.5% rise.
Quarterly and annual price changes are more helpful in spotting trends, say analysts. In the latest quarter (between November and January), house prices were 0.6% lower than in the previous three months (August to October). Meanwhile, prices in the three months to January were 0.8% higher than in the same period a year earlier.
Russell Galley, managing director of Halifax, said: “Attention will no doubt be drawn towards the monthly fall of 2.9% from December to January, the second time in three years we have seen a drop as the new year starts. However, the bigger picture is actually that house prices have seen no movement over the last year, with annual growth of just 0.8%.
“There’s no doubt that the next year will be important for the housing market with much of the immediate focus on what impact Brexit may have. However, more fundementally it is key underlying factors of supply and demand that will ultimately shape the market.”
Official data and industry surveys also point to a general cooling in price growth, mainly driven by a slowdown in the south and east of England.
The Office for National Statistics figures show annual house price growth across the UK had slowed to 2.5% in the year to December,the lowest rate since July 2013.
The latest monthly snapshot from the Royal Institution of Chartered Surveyors (RICS) also shows a flat market with buyer enquiries, agreed sales and new listings all down. Uncertainly over Brexit and high prices in parts of the country are putting buyers off, said RICS
The RICS survey shows new buyer enquiries fell in January, the sixth successive monthly decline with weakening demand across virtually all of the UK. Scotland was the slight exception, but even here the trend was flat.
Meanwhile, number of properties being listed on the market also fell with the net balance of -25% the lowest since July 2016, the month after the EU referendum. The average time it takes to sell a property, from listing to completion, has reached 19.4 weeks, according to the RICS residential market survey.
RICS said the most downbeat responses to its surveys continue to come from London and the South East, followed by East Anglia and the South West. Each of these regions have expericed strong price growth over the past six years, which has stretched affordability, and the high prices are a key factor in putting off would-be buyers.
Surveyors and estate agents have, however, become more optimistic about prices and sales since December over the next 12-months.
The lettings market fared better with tenant demand rising modestly in three months to January. Demand has now picked-up in each of the last three quarters, following a flatter trend in early 2018, said RICS. However, new landlord instructions continue to dwindle, with the survey’s lettings indicator in a negative value for the eleventh successive month.