Annual house price growth slowed to its lowest pace in more than three years in February, new figures show.
According to the latest Halifax House Price Index, annual house price growth rose 5.1% compared to January’s figure of 5.7% – the lowest since July 2013.
Monthly house prices edged up slightly by 0.1% following a 0.9% fall in January. This took the average house price to £219,949.
Martin Ellis, Halifax housing economist, said: “Housing demand is being supported by an economy that continues to perform well with employment still expanding. Meanwhile, the supply of both new homes and existing properties available for sale remains low. This combination is pushing up prices.
“The annual rate of house price growth has, however, nearly halved over the past 11 months. A sustained period of house price growth in excess of pay rises has made it increasingly difficult for many to purchase a home. This development, together with signs of reduced momentum in the jobs market and squeezed consumer spending power, is expected to curb house price growth during 2017.”
Halifax expects annual house price growth to slow between 1-4% by the end of the year.
Howard Archer, chief economist at IHS Global Insight, said: “February’s slight rise in house prices reported by the Halifax fuels our belief that house price gains over 2017 will be no more than 3% and could well be less.
“Weakening consumer fundamentals, likely mounting caution over making major spending decisions, and elevated house price to earnings ratios are likely to weigh down on house prices. However, a shortage of supply is likely to put a hard floor under prices.”
The latest Nationwide House Price Index shows that annual house price growth rose 4.5% in February while monthly house prices went up 0.6%.
Jeremy Leaf, north London estate agent and a former RICS residential chairman, said: “These figures are interesting as they slightly conflict with the Nationwide survey from a few days ago, although both show a housing market which is broadly stable with prices continuing to be supported by a lack of supply and low interest rates. This reflects what we are finding on the ground.
“Looking forward, activity does seem to have picked up a little since the slow start to the year and we hope the Chancellor doesn’t do anything to stop the market in its tracks tomorrow and in particular supports first-time buyer activity.”
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