The tide has definitely turned against the seller in the UK housing market, a leading property expert has yesterday, following the publication of new figures showing that prices have fallen for three consecutive months.
Across Britain, the average price of a home fell by 0.2% between April and May, to £208,711, according to the latest house price index from Nationwide.
The latest figures released compare with monthly declines of 0.4% in April and 0.3% in March, as a consequence, the annual growth rate has now dropped to 2.1%, which is the lowest level since June 2013, and compares with 2.6% in April.
The price data from the UK’s largest building society adds to growing weight of evidence that suggests soaring house price inflation has ended.
Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said that he expected 2% growth this year, with property prices returning to a “slowly rising path”.
He commented: “Surveys suggest supply is tightening rapidly, employment growth looks set to remain steady at about 1% year-over-year, and mortgage rates still have scope to fall a little further.
“But the days of surging house prices driven by sharply rising loan-to-income ratios are gone.”
In response to the latest Nationwide HPI, Richard Sexton, director at e.surv, said that the fall in house prices will be “welcomed by many first-time buyers” looking to take their first step onto the property ladder.
“First-time buyers are the lifeblood of the property market and their presence allows others to move up the ladder and keep the whole market moving.”
However, while the slowdown in property prices has been welcomed by those seeking to get a first foot on the property ladder, it is worth pointing out that many household budgets are being squeezed as inflation continues to overtake wage growth, making it harder for would-be buyers to save the money needed for a deposit.
Robert Gardner, Nationwide’s chief economist, commented: “It is still early days, but this provides further evidence that the housing market is losing momentum. Moreover, this may be indicative of a wider slowdown in the household sector, though data continues to send mixed signals in this regard.”
But Jonathan Hopper, managing director of Garrington Property Finders, was keen to point out that the slowdown in the housing market is anything but uniform.
He commented: “Properties in some regions are seeing double-digit price reductions, yet at certain price points in the most in-demand areas, gazumping and intense competition between buyers are the order of the day.
“If there is one universal it is the chronic shortage of supply. Where there are more buyers than homes for sale, prices will inevitably edge upwards.”