UK house price growth remained sluggish in February, as property experts warned the housing market is “on its knees”.
Prices rose just 0.4 per cent year on year compared to January’s 0.1 per cent rate of growth, new data published today reveals.
But prices actually slumped month on month, falling 0.1 per cent from January to an average of £211,304, down from £211,966, Nationwide’s house price index found.
“After almost grinding to a complete halt in January, annual house price growth remained subdued in February,” Robert Gardner, Nationwide's chief economist, said, with experts attributing the lack of action to extended political uncertainty surrounding Brexit.
Pointing to “softened” market sentiment, he added: “Measures of consumer confidence weakened around the turn of the year and surveyors reported a further fall in new buyer enquiries 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.”
Gardner said that despite a slow influx of new properties onto the market, momentum is firmly on the side of buyers after consumer confidence weakened in the new year.
Property experts said market confidence had “shattered” despite a strong employment rate, ultra-low borrowing rates and below-target inflation.
The latest English Housing Survey showed a slight rise in the home ownership rate last year to 63.5 per cent, up from 62.6 per cent in 2017.
But property lender Octane Capital’s chief executive, Jonathan Samuels, warned “the UK property market remains firmly on its knees”.
He added: “The home ownership rate may have improved but the relationship many people have with bricks and mortar is changing irreversibly.
“March could be the month the property market finally succumbs to madness.”
All the ingredients for success
Andy Soloman, chief executive of business growth expert Yomdel, blamed the approach of Brexit uncertainty as a deal looks unlikely to be approved by parliament.
But he added: “With unemployment falling and wage growth on the up, we have all the ingredients required for a buoyant housing market, it’s just a case of sitting tight and waiting for the clouds of uncertainty to lift.”
Status quo until we leave the EU
Lucy Pendleton, founder director of independent estate agents James Pendleton, warned the current uncertainty clouding the market will be the norm until after the UK leaves the EU on 29 March.
“Assuming there’s no delay to Article 50, this is going to be the mood music until we get through to April,” she said.
“The market is falling in real terms but in the more expensive parts of the country, particularly London, it’s going to take a more significant retreat in prices to pull first-time buyers to the table in significantly greater numbers.”