Annual UK house price growth slows in March.
Annual UK house price growth slowed to 5.7% in March from 6.9% in February, according to the latest Nationwide House Price Index. House prices fell 0.2% month-on-month after factoring in seasonal factors, with London seeing the weakest growth of all UK regions in the first quarter. The median house price in March was £ 232,134.
Nationwide says that policy support is likely to drive the housing market for the next six months, but the longer-term outlook remains “very uncertain.”
Commenting on the numbers, Robert Gardner, chief economist at Nationwide, said: “As the overall economy and the job market have performed better than expected in recent months, the slowdown in March likely reflects weakening demand before the original end of the stamp duty holiday before the Chancellor announced the budget extension.”
“Recent signs of economic resilience and the stimulus measures announced in the budget, including the extension of the license plan and exemption from stamp duty, as well as the introduction of a mortgage guarantee plan, suggest that the activity is likely to the housing market remains optimistic for the next six months.”
“The longer-term prospects remain very uncertain. It may be that the recovery will continue to gather momentum and changes in housing demand resulting from the pandemic will continue to drive the market. However, if the labor market weakens towards the end of the year as policy support withdraws, as most analysts expect, activity is likely to slow closer to the end of 2021, perhaps in a way pronounced.”
Gardner also broke down regional index data, pointing to the regions that showed the weakest and strongest price growth.
Gardner continued: “Overall annual UK house price growth in the first quarter was similar to that in the fourth quarter, although there was a mixed picture across all regions, with about half experiencing a slowdown in growth.”
“Northern Ireland experienced the highest growth of any home nation, with an increase of 7.4%. Meanwhile, Wales and Scotland saw their annual price growth accelerate to 7.2% and 6.9%, respectively.
“England was the worst-performing home country in the three months to March 2021, with annual house price growth of 6.4%, a slight slowdown compared to the last quarter (Q4 2020) when prices rose at an annual rate of 6.9%.”
“The Northwest was the region with the best results, with prices that rose 8.2% year-on-year. This is the strongest price growth seen in the region since 2005 and average prices hit a record £ 181,999. There was also a new recovery in price growth in neighboring north, which experienced an annual increase of 7.2%.”
“London was the weakest performing region, with annual price growth slowing to 4.8%, from 6.2% in the fourth quarter of last year.”
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