Nationwide’s monthly housing market index has reported a small uptick in annual property price growth.
Published today (27 April), the index showed annual house price growth rose to 2.6 per cent in April, from 2.1 per cent in March.
House prices also rose by 0.2 per cent over the month, after taking account of seasonal factors.
Robert Gardner, chief economist at Nationwide, said this comes after February saw a softening in house purchase approvals to 64,000 cases, following a surprise rise in January.
He added: “These figures are broadly in line with our expectations and close to the average for the last three months of 2017.
“Surveyors continue to report subdued levels of new buyer enquiries and recent months have also seen a softening in new instructions.”
He said the share of cash transactions has declined a little over the past eighteen months. This is partly due to the introduction of the additional stamp duty levy on second properties, which has impacted the purchase of second homes and rental properties, a large proportion of which tend to be conducted in cash.
He added cash buyers continue to play an important role in the housing market, accounting for around a third of transactions.
The report added that house prices are set to rise by around 1 per cent over the course of 2018.
Jonathan Samuels, chief executive of the property lender Octane Capital, said the 0.2 per cent rise in April negates March’s drop and neatly symbolises a market that lacks momentum.
He added: “While the annual rate of growth has nudged up slightly, it’s unlikely to break out of the very low single digit bracket in 2018.
“At the same time, low stock levels and continued cheap borrowing rates mean that while the market is cooling in parts of the country, above all the capital, prices will not collapse.
“While inflation has fallen and a rate rise next month is no longer the dead cert many had it down as, households still feel squeezed and transaction levels remain low.
“The high inflation and low wage growth we’ve endured will take time to work itself out of the system.”
Commenting on the results, Jeremy Leaf, north London estate agent and a former RICS residential chairman, said: “The small increase in house price growth is probably more to do with a lack of supply rather than a burst of springtime activity.
“Nevertheless, a rise is more welcome than a fall and in line with other recent statistics shows that the market is continuing to follow a slow upward path, albeit without any fireworks.”
Nicholas Finn, executive director of Garrington Property Finders, said after making a brittle start to the year, the property market is settling back into a period of cautious normality.
He added: “Last year’s snap election cheated the market of its traditional post-Easter boost, but this Spring we’ve seen an injection of new stock and an uptick in buyer interest.
“Of course the number of homes for sale remains at a desperately low level, but crucially the market has become free-flowing again.”
Source: FT Adviser