UK house price growth chills to five-year low — Halifax
UK house prices are rising at the slowest rate since 2013, according to data released on Wednesday that underscore the bite from falling consumer purchasing power and uncertainty over Brexit.
Prices rose 1.8 per cent in the three months to February compared with the same period a year earlier, according Halifax, the mortgage lender. The pace was below the 2.2 per cent recorded in the three months to January but above the 1.6 per cent forecast by economists in a FactSet poll.
The slowdown highlights how the “the fundamentals for housebuyers are likely to remain challenging,” according to Howard Archer, chief economic adviser at the EY Item Club. He added:
Consumers have faced an extended squeeze on purchasing power, and it is likely to ease only gradually as the year progresses. Additionally, housing market activity is likely to be hampered by fragile consumer confidence and limited willingness to engage in major transactions.
Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said that a rise in mortgage rates, sparked by the Bank of England’s November 2017 rate increase, had also played a role in the weakness.
“The slowdown in the three month average of year-over-year growth in house prices to the lowest rate since March 2013 demonstrates that even the modest rise in mortgage rates over the last few months has hit the market hard.,” he said.
Russell Galley, managing director at Halifax, struck a more optimistic tone, saying that “mortgage rates continue to stay low by historical standards.”
“While we expect price growth to remain low, the low mortgage rate environment, combined with an ongoing shortage of properties for sale, should continue to support house prices over the coming months,” he added.