According to recent research from Nationwide, house prices in the UK fell for the first time in five months. Researchers revealed that average houses prices fell 0.1% from £188,446 in January to £187,964 in February. Annual house price growth slowed for the 6th month in a row to 5.7%, its lowest since September 2013.
These figures are based on home loans that have been approved during the month and adjusted to reflect a typical house. They appear to support other recent data which suggest falling interest from buyers.
However, figures from the Bank of England show that mortgage approvals rose in January, for the second consecutive month, which suggests that house prices may rise again.
The Royal Institution of Chartered Surveyors issued a report which showed that only 2% of its members were expecting prices to rise over the next month; this is the lowest proportion since May 2013.
Nationwide’s chief economist, Robert Gardner, said “Mortgage rates remain close to all-time lows and consumer confidence remains buoyant thanks to a further steady improvement in labour market conditions.
“The unemployment rate has continued to decline and earnings growth has picked up, particularly in inflation-adjusted terms, thanks in part to the sharp decline in energy prices.”
He also said that the lack of the stock and ongoing barriers to entry for first time buyers, i.e. the biggest challenges to the country’s property market, were not going away.
The annual English Housing Survey found that the proportion of 25-34 year olds who own their home fell from nearly two thirds in 2003-04 to just over one third in 2014. This highlights some of the generational inequality in Britain’s housing market.
Mr Gardner said that the home ownership rate dropped to 63.3% in 2013-14 compared to 65.2% the year before.
“The English Housing Survey suggests that 25 per cent of people in social housing and 61 per cent of those in the private rental sector expect to be able to buy their own home in future,” he said. “However, this remains a longer-term aspiration, with around half of renters expecting it to take five years or more to take their first steps into the housing market.
If you’re looking to take that first crucial step on to the property ladder, saving up a deposit can be the hardest step. However, with the housing market set to return to a healthy state, purchasing your first home may become easier.