Is Britain's property boom finally coming to an end? House prices up 6.8% since January... the slowest rise in over a year
02-04-2015
- Properties exchanging hands for 6.8% more this month than a year ago
- House prices are now 2.4% higher than before the 2008 economic crash
- The average home in Britain hit £188,446 in January, Nationwide said
- Number of mortgages approved has been about 20% below last year
By Tom McTague, Deputy Political Editor for MailOnline
House prices are rising at their slowest rate since 2013 - as Britain's property boom finally showed signs of coming to an end.
Properties are exchanging hands for 6.8 per cent more this month than a year ago, the lowest pace since November 2013 according to Nationwide.
House prices are now 2.4 per cent higher than before the 2008 economic crash - with the average home worth £188,446.
Properties are exchanging hands for 6.8 per cent more this month than a year ago, the lowest pace since November 2013 according to Nationwide
Separate Land Registry figures said prices in England and Wales in the year to December rose 7 per cent, down from 7.2 per cent in November and the fourth month in a row that the annual rate has fallen.
Both sets of figures show that average house prices have remained static since last summer.
The Nationwide said the reasons for the slowdown in the housing market since then 'remain unclear', as the economic background has in fact continued to improve.
But it predicted that house prices would take off again once people started to feel the benfit of pay rises.
Nationwide's chief economist Robert Gardner said the number of mortgages approved had been about 20 per cent below last year - and surveyors continued to report subdued levels of new buyer enquiries.
But Mr Gardner said the reasons for the continued slowdown were unclear given the fall in unemployment, wages that have started to rise faster than inflation and high levels of consumer confidence which have helped fuel strong retail sales growth.
'If the economic backdrop continues to improve as we and most forecasters expect, activity in the housing market is likely to regain momentum in the months ahead,' he said.
Britain's five year house price boom has benefited Conservative supporting areas much more than Labour constituencies
Prices were also likely to be supported by the long-term shortage of new houses coming onto the market.
'It is encouraging that the number of new homes built in England was up 8 percent in the year to the third quarter of 2014. However, this is still 34 percent below pre-crisis levels and little over half the expected rate of household formation in the years ahead,' Gardner said.
The Land Registry data showed that London house prices ended the year up by 16.3 per cent, at an average of £464,936.
In nine boroughs prices were up by more than a fifth over the year, and in every part of the capital rises were in double digits.
The biggest leap in prices was in the north-east borough of Waltham Forest, which includes Walthamstow, which saw prices increase by 25.1 per cent to an average of £368,000.
Kensington & Chelsea recorded the lowest level of growth within London, at 11.5 per cent over the year, but the average price was still a lofty £1.3million.