Mortgage News
House price growth continues to slow
House price growth fell to 5.7% in February following a slowdown in activity, research has shown.
The latest Nationwide house price index said yearly growth had fallen back from the 6.8% recorded in January to 5.7% last month.
This was the sixth month in a row that year-on-year house price growth had fallen back.
This report said prices had fallen 0.1% month-on-month and the average property was now worth £187,964.
Robert Gardner, Nationwide’s chief economist, said the general outlook for the market remained strong.
“The broader economic backdrop has remained supportive of housing market activity,” he said.
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“Mortgage rates remain close to all-time lows and consumer confidence remains buoyant thanks to a further steady improvement in labour market conditions. Indeed, the unemployment rate has continued to decline and earnings growth has picked up, particularly in inflation-adjusted terms, thanks in part to the sharp decline in energy prices.”
Gardner said activity had shown signs of improvement towards the end of 2014, but it would take a few more months before any trend could be established.
“Nevertheless, the pace of housing market activity remains fairly subdued. There was a small increase in the number of mortgages approved for house purchase in December, up 2% from 59,000 in November to 60,300 in December, though it remains too early to determine whether this marks a turning point in activity.”
Nationwide said the proportion of people owning their home fell to its lowest level in more than a decade with 63.3% of properties owned in 2013/14.
This is down on the 65.2% recorded the previous year and the all-time high of 70.9% in 2003.
“If we look at the shift in tenure patterns by age over the past decade we see a marked decline in home ownership rates amongst the younger age groups,” Gardner added. “In particular, among 25-34 year olds, traditionally the segment containing most first time buyers, the proportion of households owning their own home fell from 59% to 36% between 2004 and 2014.”