Prices in UK dipped slightly in the first month of 2018, latest lender index shows
Property prices in the UK fell marginally in the first month of 2018 by 0.6% but are still 2.2% above a year ago, according to the latest lender index to be published.
Prices in the three months to January 2018 were unchanged, with the quarterly rate down from the 1.3% recorded in the last three months of 2017, taking the average value of a home to £223,285, the data from the Halifax shows.
The monthly fall was the second in a row following a 0.8% decrease in December which was first decline in six months as the housing market in 2017 followed a similar pattern to the previous year, according to Russell Galley, managing director of Halifax Community Bank.
‘Although employment levels grew by 102,000 in the three months to November, household finances are still under pressure as consumer prices continue to grow faster than wages. Additionally, it’s still too early to see any impact for first time buyers from the abolition of stamp duty on purchases of up to £300,000, which was announced in the November Budget,’ he said.
‘Despite the recent rise in the Bank of England Base Rate, mortgage rates are still very low. This, combined with an ongoing acute shortage of properties for sale, will continue to underpin house prices over the coming months,’ he added.
Russell Quirk, chief executive officer of Emoov, pointed out that the end of a year and beginning of the next is always a tough time for then housing market and he believes the usual spring pickup will kick in.
He also pointed out that while it may be too soon to see any direct impact from the abolition of stamp duty for many first time buyers, a number of industry sources are reporting a strong uplift in buyer demand among this group.
‘But as we are all too aware, there is a severe lack of building stock to quench the thirst of the nation’s aspirational buyers as it is, let alone with this additional influx of interest. As a result, it is possible that another Government initiative to help those priced out of the market could inadvertently see prices increase as demand is fuelled and further outweighs supply,’ said Quirk.
‘There is also a chance that shrewd sellers in the £280,000 region will increase their asking prices to sit just below the stamp duty threshold in order to maximise their property potential in an otherwise slower market. If this were to happen, prices would see an additional boost as a result, but to the detriment of struggling buyers,’ he added.
Jeremy Duncombe, director of the Legal & General Mortgage Club, believes that the housing market is certainly in a healthier position than it has been in previous years. ‘Steadier year on year house price inflation coupled with low mortgage rates and Government schemes, such as Help to Buy and Shared Ownership is providing buyers with a strong footing to make their first moves,’ he explained.