UK house price growth remained weak in April with average prices ticking up 0.4%, according to Nationwide.
Its house price index now measures the average property price at £214,920.
Annual house price inflation is minimal at 0.9% – marking the fifth month in a row in which annual growth has been below 1%.
Robert Gardner, Nationwide’s chief economist, explained the subdued price increase:
“Indicators of housing market activity, such as the number of property transactions and the number of mortgages approved for house purchase, have remained broadly stable in recent months, even though survey data suggests that sentiment has softened,” he said.
“Measures of consumer confidence weakened around the turn of the year and surveyors report that new buyer enquiries have remained subdued.
“While the number of properties coming onto the market has also slowed, this doesn’t appear to have been enough to prevent a modest shift in the balance of supply and demand in favour of buyers in recent months.”
First-time buyer boost
Despite the weak growth and a dip in demand, there have been more first-time buyers entering the housing market, said Nationwide, with numbers getting close to pre-financial crisis levels.
Gardner said: “First-time buyer numbers have been supported by the strength of labour market conditions, with employment rising at a healthy rate, and earnings growth slowly gathering momentum.
“While house prices remain high relative to average earnings, low mortgage rates have helped to support mortgage affordability. Indeed, raising a deposit appears to be the major barrier for prospective first-time buyers, since the cost of servicing the typical mortgage remains in line with or below long-run averages as a share of take home pay in most regions of the UK.”
Jonathan Samuels, CEO of Octane Capital, added: “It’s a curious market at present, driven by first-time buyers at one extreme and professional investors and landlords at the other.
“Inbetween those two categories of buyers, activity levels are fairly subdued. With amateur landlord numbers decreasing by the day, first-time buyers and professional investors are increasingly active given the discounts available and reduced competition.
“It’s without doubt a buyers’ market but the lack of homes for sale means prices are competitive rather than collapsing.
“It’s hard to see prices picking up until there is more clarity on Brexit, which could take some time yet given the disarray in Government.”
Get real time update about this post categories directly on your device, subscribe now.