House prices were just 0.4% higher in February than a year earlier amid signs that the housing market has shifted more in favour of buyers rather than sellers in recent months.
In January, property values had been 0.1% higher than in January 2018 – which was the weakest annual growth in nearly six years, Nationwide Building Society said.
Across the UK, the average house price in February was £211,304 – a 0.1% month-on-month fall.
Robert Gardner, Nationwide’s chief economist, said: “After almost grinding to a complete halt in January, annual house price growth remained subdued in February, with prices just 0.4% higher than the same time last year.
“Indicators of housing market activity, such as the number of property transactions and the number of mortgages approved for house purchase, have remained broadly stable in recent months, but survey data suggests that sentiment has softened.
“Measures of consumer confidence weakened around the turn of the year and surveyors reported a further fall in new buyer inquiries over the same period.
“While the number of properties coming onto the market also slowed, this doesn’t appear to have been enough to prevent a modest shift in the balance of demand and supply in favour of buyers in recent months.”
Mr Gardner also said a supportive labour market and some recent tax changes have improved the bargaining power of people buying a home to live in relative to investors.
Tax changes which have affected landlords include a stamp duty hike for people buying second homes.
Meanwhile, first-time buyers have been helped by schemes such as Help to Buy, Mr Gardner said.
Howard Archer, chief economic adviser at EY ITEM Club, said February’s figures show “another weak performance” for house prices.
He said: “If Brexit is delayed for a few months, ongoing uncertainty is likely to weigh down on the housing market and could well see house prices stagnate over the year or even fall slightly.”
Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said: “We still expect the official measure of house prices to rise by 1.5% over the course of 2019, though most of that increase likely will be concentrated in the second half of this year.”
Jeremy Leaf, a north London estate agent and former residential chairman of the Royal Institution of Chartered Surveyors (RICS), said: “The 2019 housing market clearly hasn’t quite taken off in the way many hoped or expected.”
Mark Harris, chief executive of mortgage broker SPF Private Clients, said: “The spring-like weather has not quite filtered through to the housing market with price growth remaining subdued.
“Uncertainty over Brexit continues to have an impact and is likely to for the next few weeks at least.”
Mr Harris said several mortgage lenders continue to trim loan rates in an effort to encourage more business “while innovative tweaks here and there are increasing as an alternative to offering the cheapest rate in the market”.
Source: Express and Star