Nationwide Building Society has released new data showing that average housing prices in the UK hit a record of £213,000 in April.
A 0.2% increase in property prices was recorded in April on a month-on-month basis, an increase from the 0.2% decline recorded in March according to Nationwide's house price index. A 2.6% increase in the pace of house price growth was also recorded.
The average price of a house was £207,699 at the same time last year.
This positive news should be tempered with the fact that house price growth is expected to slow to one percent over the course of the year, due to the expectations of higher rates and slow economic growth.
Robert Gardner of Nationwide asserts that:
"Looking ahead, much will depend on how broader economic conditions evolve, especially in the labour market, but also with respect to interest rates.Subdued economic activity and the ongoing squeeze on household budgets is likely to continue to exert a modest drag on housing market activity and house price growth this year.We continue to expect house prices to rise by around one per cent over the course of 2018."
Buy to let transactions have fallen, removing one driving factor for price growth. The uncertainty due to brexit is also a factor.
Fragile consumer confidence, expectations of interest rate rises and a squeeze on the purchasing power of savers have all had an effect on the housing market.
A continuing house shortage may keep prices from decelerating any further, however, the government has pledged to increase construction of new homes to 300,000 a year in order to remedy this.
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House prices hit new record high, but Nationwide warns of slowdown due to weak economy and looming interest rate hike