UK records weakest house price growth in 12 months
The mortgage lender Nationwide has released new statistics about property sales in January 2017, and on the surface, it doesn’t look good for sellers. In January, house prices saw the weakest annual rate of growth in over a year, which some estate agents and property experts believe indicates a potential slowdown in the property market for 2017.
Why are house prices slowing?
When compared to the same period last year, annual growth fell from 4.5% in December 2016 to 4.3% in January of this year, according to the mortgage lender Nationwide. This marks the weakest annual growth for property prices since November 2015. However, it should be noted that property prices on a month-to-month basis actually rose by 0.2% in January compared to December, and the average UK property price stood at £205,240 in January. The monthly price rise in December was 0.8% compared to November.
The chief economist of Nationwide, Robert Gardner, commented on these new numbers, saying he believes the small growth in property prices indicates that the property market is entering a period of market softening; this is, in large part, due to the British economy experiencing a period of high consumer inflation, a weak jobs market, and almost non-existent wage growth. All of these factors are putting pressure on household budgets, leading to a slow period for selling and buying.
While the future of the property market may appear clouded, there are several reasons to remain optimistic. There were worries that the Brexit vote would lead to a slowdown in property sales, but in the aftermath of that vote, we can see that the property market has remained relatively stable. We can also point to the continuing high sales of properties to investors and buy-to-let landlords following the stamp duty increase, another change that analysts saw to be an omen of doom for the market. The last year has demonstrated that the property market can remain stable under the most arduous of circumstances.
Property market outlook still conservative
Despite the relatively stability of the property market following the Brexit vote, the uncertainty surrounding the market’s immediate future has led to many property analysts being conservative in their estimates for growth over the forthcoming year. It is believed that house price growth will half in 2017, falling from 4% last year to 2.5%.
While we are ever-optimistic about the future of the property market, trends taken from the last 60 years have demonstrated that the biggest gains in house prices happened in the 2000s, prior to the economic crash in 2008. It seems that now, as it has in previous years, that real house price growth will hinge on the wider economic developments, both within the UK and the UK’s financial place in the world economy.
At CPS Homes, we know the Cardiff property market like the back of our hands, and as such, we know that the Welsh capital still has a thriving property purchasing and selling environment. If you’re looking to sell your property, or if you’re looking to buy a new home or investment opportunity in one of the many great Cardiff neighbourhoods, get in touch on enquiries@cpshomes.co.uk, or pop into one of our Cardiff branches.
