House price growth takes a knock

February 14, 2017 / Isla MacFarlane
House price growth takes a knock

In line with seasonal expectations, price rises indicate a spring lift but year-on-year price growth continues to decline, according to home.co.uk. Moreover, a surge in monetary inflation due to a weak pound means that capital values are going nowhere in real terms.

Whilst the London market continues to suffer the consequences of oversupply and overly high prices, it is the East of England that leads the regional league table with stunning price appreciation. Prices there have risen twice as fast as the next best region, the East Midlands, over the last twelve months.

Worryingly, supply is also rising in the region and this observation suggests that the East will soon be the next region to endure the same post-boom plight as London and the South East: such rapid growth raises concerns over the sustainability of this rally and home prices are becoming seriously out of step with earnings and rents.

Aside from London, the South East and the East of England, confidence is apparent across all other English regions.

Prices are up both month-on-month and year- on-year and, typically, properties are spending less time on the market than they were a year ago.

Only Scotland and Wales have shown price declines since January. The strongest monthly rises, aside from the East, were in the South East (0.9%), East Midlands (0.5%) and the North West (0.6%).

A seasonal fillip is, of course, to be expected at this time of year. However, we enter 2017 on a declining year-on-year price trend and this key indicator shows that the UK property market is cooling overall. In February 2016 the annualised rate of increase of home prices was 8.1%; today the same measure is a mere 3.0%.

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