The month of December was negative in terms of UK house price growth, which is the first fall in six months according to Halifax.
A 0.6% fall in average house prices meant that the new average fell to £225,021, with the annual growth rate declining to 2.7% in the three months to December from 3.9% recorded in the previous three months.
UK housing price growth may slow further with some forecasters predicting 1% growth for 2018, which would mean that property values will fall when inflation is taken in to account (Rupert Jones, Guardian, December 2017).
According to Chris Taylor of Regency Residential:
“This decline in the market is mainly a correction where London is concerned, following years of unprecedented growth with many cities such as Manchester, Bristol and Birmingham seeing record selling prices.”
According to Nationwide, UK prices increased by 2.6% last year, with prices in London dropping for the first time in eight years.
Nationwide expects price growth to slow to between 1% and 1.5% in 2018.
Part of the reason for the slow pace of housing price growth could be an increase in supply according to Chris Taylor of Regency Residential:
“Coupled with the chancellor’s move to abolish stamp duty for first-time buyers on properties under £300,000 and a weak pound encouraging increasing investment from abroad, this will see a stimulus in the market which should sustain prices, especially in properties outside the capital.”
According to Russell Galley of Halifax, wages and the current level of economic uncertainty were deterring potential buyers, however, the continuing shortage of properties on the market, low levels of house building, high employment and low mortgage rates would keep prices from falling in the short term.
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UK house prices falling for first time since June, says Halifax