U.K. House Prices Start Year on Negative Note as Demand Wanesby
Values declined 0.9% from December, Halifax report says
Weaker growth, affordability constraints to damp growth
U.K. home prices declined at the start of the year, underscoring predictions for a slowdown in 2017, according to Halifax.
Values fell 0.9 percent from a month earlier, posting their first slide since August, the mortgage lender said. While values in the three months to January rose an annual 5.7 percent, that’s almost half the 10 percent peak seen in March. Halifax expects price growth to slow to between 1 percent and 4 percent by the end of the year.
“U.K. house prices continue to be supported by an ongoing shortage of property for sale, low levels of house building, and exceptionally low interest rates,” said Martin Ellis, an economist at Halifax, in a statement with the report. “Nonetheless, weaker economic growth and increasing pressure on spending power, along with affordability constraints, are expected to dampen housing demand, resulting in some downward pressure on annual house price growth during the year.”
The average British house price last month was 220,260 pounds ($272,000) and supply remains very low as sellers stay put, according to Halifax. Across the U.K., new sales listings failed to pick-up in December for a 10th month, leaving stock levels close to a record low and constraining market activity, the report said.
Even so, Halifax estimates the number of first-time buyers climbed 7 percent last year to the highest level since the start of the financial crisis in 2007.