UK house prices rise in March – Nationwide

Property118

UK house prices rise in March – Nationwide

Annual UK house price growth reached 2.2% in March, up from 1% in February with values also rising 0.9% month on month, Nationwide reveals.

The average price climbed to £277,186 in March from £273,176 the previous month.

Robert Gardner, the lender’s chief economist, said: “The pickup in house price growth suggests that the market had regained momentum after the slowdown recorded around the turn of the year.

“However, the sharp rise in global energy prices in response to developments in the Middle East represents a significant shock to the global economy, clouding the outlook.”

Housing affordability reversed

He continued: “In the near term, UK economic growth is likely to be slower and inflation higher than previously expected, although ultimately the impact will depend on the duration of the shock as well as the policy response.

“The outlook for interest rates is particularly uncertain and dependent on whether the demand or supply side of the economy is more adversely affected.”

He added: “If sustained, this could reverse some of the improvement in housing affordability that has taken place in recent years.

“With consumer sentiment also likely to be dented by the uncertain outlook and the prospect of rising energy costs, housing market activity is likely to soften.”

House price growth

Nationwide’s quarterly data showed most regions recorded annual price growth, although gains were limited in several parts of England.

Two regions posted annual declines in Q1, with outer South East down 0.7% year-on-year and East Anglia falling 0.4%.

Elsewhere, growth remained below 1% in the West Midlands, East Midlands and the South West.

Northern Ireland recorded the strongest performance, with prices rising 9.5% over the year.

This compared with 1.5% across the UK in Q1 and 3.3% in the North West, the next strongest region.

Scotland recorded annual growth of 3.0% in Q1, up from 1.9% in the previous quarter, while Wales saw prices increase 2.7% year-on-year.

In England, annual growth slowed to 0.9% from 1.2% in Q4.

Northern regions including the North, North West, Yorkshire and the Humber, East Midlands and West Midlands saw prices rise 1.5% year-on-year.

The North West remains the strongest performing English region at 3.3%.

Property sector reaction

Karen Noye, a mortgage expert at Quilter, said: “Today’s figures capture the early stages of the repricing that has taken place in mortgage markets since the start of the Iranian conflict.

“While some resilience in house prices appears to have remained for now, momentum will likely soften in the months ahead as higher mortgage rates and increased economic uncertainty weigh on buyer confidence.”

Nathan Emerson, the CEO of Propertymark, said: “An uplift in house prices will be welcomed by the market and suggests that buyer demand remains resilient despite ongoing economic headwinds.

“Improved sentiment, coupled with marginally better affordability conditions earlier in the year, appears to be supporting price growth.”

Tom Bill, the head of UK residential research at Knight Frank, said: “The impact from the Middle East conflict on the housing market is still in the post.

“The fact mortgage offers last for six months means the effect of higher borrowing costs will filter into the market this spring and summer, putting downwards pressure on prices and transaction volumes.

“The longer-term impact hinges on the intensity and length of the conflict.

“That said, one mitigating factor is the amount of equity in the system and the fact more homes are now owned outright than with a mortgage.”

Jason Tebb, the president of OnTheMarket, said: “This data shows just how much market activity and sentiment continued to pick up at the start of this year, with buyers and sellers proceeding with their moves with more clarity and confidence.

“While interest rate rises, rather than previously expected reductions, seem increasingly likely depending on inflationary pressures, six interest rate cuts in the past 20 months have greatly assisted affordability and put borrowers in a stronger position.”

The post UK house prices rise in March – Nationwide appeared first on Property118.

View Full Article: UK house prices rise in March – Nationwide