According to the latest Nationwide’s House Price Index, there has been a decline in the development of house price growth. It has been the slowest growth for five years in June. With reference to the statistical data provided, the south seems to be performing far poorer than other areas, with prices down 1.9% year-on-year.
However, despite this recent drop, house prices in the capital remain more than 50% above their 2007 peak, whereas overall prices in the UK are just 15% higher, with the East Midlands exhibiting the strongest performance as a region in England, at 15%.
Scotland was exceptional as a region, witnessing a pickup in annual price growth to 3.1% this quarter. Wales witnessed a softening in price growth to 4%, despite it being the best performing home nation.
Nationwide’s Chief Economist, Robert Gardner commented: “Annual house price growth fell to its slowest pace for five years in June. However, at 2% this was only modestly below the 2.4% recorded the previous month.
“Indeed, annual house price growth has been confined to a fairly narrow range of c2-3% over the past 12 months, suggesting little change in the balance between demand and supply in the market over that period.
“There are few signs of an imminent change. Surveyors continue to report subdued levels of new buyer enquiries, while the supply of properties on the market remains more of a trickle than a torrent.
“Looking further ahead, much will depend on how broader economic conditions evolve, especially in the labour market, but also with respect to interest rates.
“Subdued economic activity and ongoing pressure on household budgets is likely to continue to exert a modest drag on housing market activity and house price growth this year, though borrowing costs are likely to remain low. “Overall, we continue to expect house prices to rise by around 1% over the course of 2018.”
Focusing on the development of house prices over time, the north-south divide very much remains, as evidenced in Nationwide’s Quarterly Regional House Price Statistics report. Particularly in the southern regions of England, house prices are now above the 2007 levels. Particularly London, where, despite recent price falls, prices are now over 50% above their previous peak. Meanwhile, in the north, prices are similar to or below 2007 levels.