House price growth has slowed ‘modestly’ but remains in ‘double digits’ – market ‘buoyant’


House price growth has slowed ‘modestly’ but remains in ‘double digits’ – market ‘buoyant’

The latest HPI shows that annual house price growth slowed “modestly” to 12.1 percent in April, down from 14.3 percent in March. After taking accou

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The latest HPI shows that annual house price growth slowed “modestly” to 12.1 percent in April, down from 14.3 percent in March. After taking account of seasonal effects, prices are 0.3 percent. Commenting on the figures Robert Gardner, Nationwide’s Chief Economist, said: “Annual house price growth slowed modestly in March, nevertheless, this is the 11th time in the past 12 months that annual growth has been in double digits.

“Prices rose 0.3 percent month-on-month, after taking account of seasonal effects, the ninth successive monthly increase, though this is the smallest monthly gain since September last year.

“Housing market activity has remained solid with mortgage approvals continuing to run above pre-Covid levels. Demand is being supported by robust labour market conditions, where employment growth has remained strong and unemployment rate has fallen back to pre-pandemic lows.

“With the stock of homes on the market still low, this has translated into continued upward pressure on house prices.”

The expert said it is “surprising” that the market conditions have remained so “buoyant” given the rise in the cost of living.

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Housing affordability has also deteriorated in the last two years while the cost of homes outstrips income growth.

Mr Gardner continued: “This month, we conducted a survey of 3,000 consumers across the UK to better understand current market conditions. It was striking that 38 percent of respondents stated that they were either in the process of moving or considering a move.

“The proportion was particularly high in London, where almost half said they were moving or considering a move. But even in Wales, where the share was lowest, more than 25 percent were either moving or considering a move, very high, given that only five percent of the housing stock turns over in a typical year in the UK.”

The survey also unveiled that households are considering a move to a larger property in order to get more space.

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The proportion of those citing a desire to get away from urban life has declined to 12 percent, down from 25 percent the same time last year.

Mr Gardener added: “For most movers and potential movers, the majority of those surveyed are looking to trade up, the exception being amongst those aged 55 and above, where nearly 40 percent are looking to move to a smaller property compared to just seven percent to move to a larger property.

“Perhaps unsurprisingly, given the pressure on budgets, financial reasons are cited as a factor motivating a move by a sizable minority.

“Seventeen percent of those moving or considering a move said they were doing so at least in part to reduce spending on housing, either by moving to a different area and/or by moving to a smaller property.”

Guy Gittins, CEO of Chestertons, said: “Despite the incentive of last year’s Stamp Duty Holiday no longer available, 2022 continues to set new records.

“This April, the number of agreed sales jumped by a staggering 28 percent since the beginning of the year and 12 percent compared to April last year.

“London buyers registering with our branches this April were up 31 percent whilst viewings were equally at a record here.

“This demand has created a strong sellers’ market which has led to 38 percent fewer vendors willing to reduce their asking prices compared to April 2021.”

The expert said buyers should be prepared for any property deal to take slightly longer than anticipated.

This is due to the “sheer volume” of agreed sales in April, creating a challenging workload for solicitors and banks.