House prices rose to 0.4% in February compared to 0.1% in the previous month on a yearly basis.
Meanwhile on a monthly basis prices dropped 0.1% from a 0.2% rise in January 2019.
As a result, the survey revealed that the average house price decreased to £211,304 in February 2019 from £211,966 in the previous month.
Robert Gardner, Nationwide’s chief economist, said that indicators of housing market activity, such as the number of property transactions and the number of mortgages approved for house purchase, have remained broadly stable in recent months, but survey data suggests that sentiment has softened.
He added: “Measures of consumer confidence weakened around the turn of the year and surveyors reported a further fall in new buyer enquiries over the same period.
“While the number of properties coming onto the market also slowed, this does not appear to have been enough to prevent a modest shift in the balance of demand and supply in favour of buyers in recent months.”
Slower growth and competitive rates
Mark Harris, chief executive of mortgage broker SPF Private Clients, said uncertainty over Brexit continues to have an impact and is likely to for the next few weeks at least.
He said: “On the lending front, the numbers of people owning a home with a mortgage is on the rise as lenders remain keen to lend and rates are extremely competitive. Indeed, several lenders continue to trim rates in an effort to encourage more business, while innovative tweaks here and there are increasing as an alternative to offering the cheapest rate in the market.
“First-time buyers continue to grow in numbers as lenders offer more products at high loan-to-values and the Help to Buy scheme remains popular, despite its critics. This is good news for the market as a whole.”
Kevin Roberts, director of Legal and General Mortgage Club, said that slower house price growth combined with competitive mortgage rates continues to entice buyers, particularly first-timers, who now make up the majority of home purchases bought with a mortgage.
He added: “With their numbers at a 12-year high, government initiatives, such as Help to Buy and shared ownership are helping those who may otherwise be unable to step onto the property ladder.”
“For borrowers, the influx of innovative solutions has provided more choice than ever before, which for some may seem a little overwhelming. By speaking with a mortgage adviser, borrowers can gain a better understanding of the options available and receive tailored advice that is best suited to their needs.”
Increasing home ownership
Nationwide’s Gardner also highlighted that the latest English housing survey from the Ministry of Housing, Communities and Local Government (MHCLG) showed a slight rise in the home ownership rate in 2018 to 63.5% from 62.6% in 2017.
He said: “The rise in home ownership was driven by an increase in the number of people owning their home with a mortgage, which began to increase again after declining continuously since 2005. The number of people owning their own home with a mortgage rose by 5% over the year to 6.9 million, though this is still 20% below the peak recorded in 2000.
“Supportive labour market conditions and a number of policy changes, especially in the regulatory and tax system, have improved the bargaining position of home buyers relative to investors. Government schemes, such as Help To Buy equity loan, have also helped support first time buyer numbers.”
Gardner noted that the biggest improvement in home ownership over the past year has been among those aged 35-44, helping to reverse some of the decline seen in the last few years.
“Nonetheless, at 57 per cent, the home ownership rate among this age group is still well below its 2006 peak of 73 per cent,” he continued.
“The number of households owning their homes outright remained at a record high of 7.9 million. This figure has increased by 1.2 million over the past decade, almost entirely among homeowners aged 65 or above.”