The Nationwide Building Society has reported that prices during April fell 0.4 per cent, representing an annual rate of price growth of 2.6 per cent. The slowdown was blamed on a slump in consumer spending because of an “emerging squeeze on real incomes”, and on mounting affordability issues in some parts of the country.The index showed that, by Nationwide’s method of calculation, the average UK house price now stands at £207,699.Robert Gardner, Nationwide’s chief economist, said, “It is too early to conclude whether the slowdown in house price growth is merely a blip, a reflection of the impact of the squeeze on household budgets, or is due to mounting affordability pressures in key areas of the country.“Given the ongoing uncertainties around the UK’s future trading arrangements and the upcoming election, the economic outlook is unusually uncertain, and housing market trends will depend crucially on developments in the wider economy.“However, the subdued level of building activity and the shortage of properties on the market are likely to provide support for prices. As a result, we continue to believe that a small increase in house prices of around 2 per cent is likely over the course of 2017 as a whole.”

A difficult year

Alex Gosling, CEO at online estate agents HouseSimple.com, commented, “It was widely predicted this would be a difficult year for the property market and that prediction seems to be borne out by these latest numbers.“If we were seeing a house price growth soften during a traditionally quiet period for buying and selling then this could be overlooked, but we are now bang smack in the middle of the spring market when we expect to see activity pick up.“We do have to remember though that the market has faced the invoking of Article 50 and now a snap general election. People’s buying and selling decisions are underpinned by confidence and, at the moment, they are facing a huge amount of uncertainty with is inevitably going to dent confidence.“There’s every chance the market will cool further in May as buyers and sellers hold off making a decision until after (the general election on) 8 June. But then it’s very likely we will see a late Spring bounce after the election result, which unless Labour pull off the steal of the century will see Conservatives remain in power. That should provide a timely boost of confidence to the housing market.“We need to remember that two months of negative price growth doesn’t constitute a property crash. A lack of supply is still supporting prices and mortgage rates remain extremely low. This feels like the property market has hit a minor bump in the road, not driven off a cliff.”

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Related news:

• House building surges to ten-year high in first quarter 
• Rightmove sees house asking prices reach new high
• Sales of £1 million apartments surge to new high in London

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“Lack of excitement” in the property market

Jonathan Samuels, CEO of specialist property lender Octane Capital, added, “Affordability issues and rising inflation are almost certainly factors in the current slowdown but there’s a lack of excitement in the property market, too.“The shortage of properties for sale has almost certainly caused a lot of prospective buyers to lose interest. Search for homes to buy in many areas of the country and all you see is same old, same old.“Even though people overall are confident in their jobs and can access extremely low mortgage rates, don’t underestimate the impact of an absence of choice.“The general election has the potential to make the market even more lethargic in the next month or two but there’s a chance of an uplift in transactions and interest, on behalf of buyers and sellers alike, once the result is in.“Even then it’s likely activity levels will remain conservative until there is greater clarity on the outcome of ongoing Brexit negotiations.“The property market is by no means in crisis, but for it to start hitting its stride again, there needs to be a material increase in supply and choice.”

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