House price growth cools

UK house price growth “cooled sharply” during April, according to the latest survey from the Nationwide.

House price inflation slowed sharply to 0.1% during the month, down from 1.1% recorded in March. Annual house price inflation also fell to 4.8% from 5.3% in March.

The price of a typical house in the UK is now £163,573, almost £7,500 more than at this time last year. This is equivalent to a price increase of just over £20 per day over the last twelve months.

Not unexpected
Nationwide’s Group Economist, Fionnuala Earley, said that the cooling down was not unexpected and remains optimistic on growth for the coming months.

Speaking on the results, Ms Earley said: “While the number of house purchase approvals fell back sharply in February, from 121,000 to 115,000, this remains a buoyant level of activity, well above the ten year average of about 100,000 per month.

On the supply side, estate agents are reporting some increased levels of supply on their books as new sellers come to market ? perhaps encouraged by the recent upturn in prices. But supply is still at a relatively low level and in spite of strong buyer interest, this, coupled with higher house prices choking off some demand, suggests that activity will fall towards its longer term average over the coming months.

Looking forward, we continue to expect some month to month volatility in the house price numbers as the market settles down after the unseasonably strong winter months and adjusts to the economic conditions on the horizon. While we do not expect any early move in interest rates that would stimulate or dampen the market, there are other economic factors that will affect it through their impact on disposable income and confidence.”