House prices stagnate in 2017
House prices have stagnated – falling by 0.2% from January to April this year.
That was according to Halifax’s House Price Index, which put annual growth at 3.8% in April.
Martin Ellis, Halifax housing economist, said: “House prices have stagnated over the past three months.
“Overall, prices in the three months to April were marginally lower than in the preceding three months; the first quarterly decline since November 2012. The annual rate of growth remained at 3.8% in April, the lowest rate since May 2013.
“Housing demand appears to have been curbed in recent months due to a deterioration in housing affordability driven by the sustained period of rapid house price growth during 2014-16.
“Signs of a decline in the pace of job creation, and the beginnings of a squeeze on households’ finances as a result of increasing inflation, may also be constraining the demand for homes.”
Jonathan Harris, director of mortgage broker Anderson Harris, has seen a number of down valuations.
He said: “There is changing sentiment; the best in class properties are shifting but we are seeing a number of down valuations from surveyors as caution starts to become more prevalent.
“Vendors are beginning to appreciate that their homes aren’t worth as much as they thought so we are seeing price drops in some areas.
“This is ultimately better for everyone as people who need to sell will be able to and those who want to buy will also be able to, resulting in a higher number of transactions and better fluidity in the market.”
Considering the measures to curb buy-to-let Jeremy Leaf, north London estate agent and a former RICS residential chairman, felt the market should be thankful growth of 3.8% has been maintained.
He said: “Unfortunately, low mortgage rates and a shortage of property haven’t been enough to support prices, as is reflected in these figures.
“But on the other hand we are quite encouraged that the annual level is still above where it was this time last year, bearing in mind the huge increase in demand ahead of the introduction of the 3% stamp duty surcharge last April.
“Looking forward, we are finding the market to be relatively balanced between supply and demand and still expect those people who recognise current market conditions to take advantage.
“The market does seem to be finding a new, slightly lower, level and we are certainly seeing no signs of a more substantial fall.”
Ishaan Malhi, chief executive and founder of online mortgage broker Trussle, blamed a range of factors for the cooling market, including squeezed household incomes, rising inflation and buyers adopting a sit-and-wait approach until the General Election is decided.
He said: “Homes continue to be unaffordable for so many young people, particularly in London, which may also be contributing to the price drop-off.
“It’s no surprise that a recent report showed that there’s been a surge in 25-34 year olds living with their parents in the last decade.
“It will be interesting to see where the housing crisis sits on the manifestos of the major parties, due out next week.
“The next government will need to offer a genuine and feasible solution to help regular people own their own homes.”