Nationwide: House price growth slows for second month

House prices fell in April for the second consecutive month according to figures from the latest Nationwide House Price Index.

April saw house price growth drop by 0.4% with the average price of a home in the UK costing £207,699, up slightly on March’s figure of £207, 308.

The annual house price growth fell by 2.6% – the weakest growth since June 2013.

Robert Gardner, Nationwide’s Chief Economist, said the news of slowdown in growth came as a surprise. He commented: “In some respects, the softening in house price growth is surprising because the unemployment rate is near to a 40- year low, confidence is still relatively high and mortgage rates have fallen to new all-time lows in recent months.”

He suggested that the decrease might be a result of “emerging squeeze on real incomes” due to the weaker sterling rate.

Mr Gardner said the advancing gap between house prices and earnings was also key factor in the slowdown: “the typical house price is currently 6.1 times average earnings, well above the long run average of 4.3 times earnings, and close to the all-time high of 6.4 times recorded in 2007.”

The report said that despite these pressures, there were signs that people were still spending money with car sales remaining robust.

Nationwide said that on-going uncertainties surrounding Brexit meant it was difficult to conclude whether the softening was a blip, a result of a squeeze on people’s incomes or affordability issues.

Despite these issues, the building society said there was still strong demand for housing that should see house price growth remain around 2% for the rest of 2017.

If you would like to read more articles like this then please click here

The post Nationwide: House price growth slows for second month appeared first on UK Construction Online.