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Annual house price growth to turn negative by end of 2018

Rozi Jones
19th October 2018
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"The Chancellor will face a difficult balancing act for housing when he comes to do his Budget at the end of this month."

House price growth continues to slow, with a monthly drop of 0.1% and annual growth of just 0.9% - the lowest level in six and a half years, according to the latest data from Your Move.

Acadata's analysis of the figures suggests that the annual rate of house price growth will be in negative territory by the end of the year.

Almost every region has seen a significant slowdown in the rate of annual growth, with the South East becoming the first region to report negative annual growth.

Likewise, transactions remain weak, down 16% from August, with an estimated 72,500 sales in September.

The West Midlands and East Midlands led the way in terms of annual house price growth with a 2.9% and 2.3% rise respectively.

Herefordshire, up 4.1% annually, and the West Midlands conurbation (up 4.0%) were the top performing areas in the West Midlands, while Rutland, up 4.5% annually, saw the strongest growth in the East Midlands. At 5.8%, it also recorded the highest monthly increase of any authority in England and Wales in August.

Neither region had any area that can match the performance over the last year in Monmouthshire, Wales, however. Despite a slight slowdown in August, with monthly prices down 1.5%, they are up 12.2% annually, the highest in England and Wales for the third month running. That’s despite the fact that the area is already the most expensive local authority area in Wales.

Combined with strong performance from Newport, which is up 9.3% annually, means Wales is the only other region with annual growth to top 2.0%. Along with Powys and Rhondda Cynon Taf, all three of these local authorities also set new peak prices in August – half of all those to do so.

The others were Southend-on-Sea (up 1.5% annually) in the East, Merseyside in the North West (up 2.7%), and North Lincolnshire in Yorks & Humber (up 5% annually).

Despite the latter’s strong performance, Yorks & Humber actually saw growth slow in August, with annual price rises falling from 2.3% to 1.5%. Much of that is down to the slowdown in South Yorkshire, down from 3.3% in July to 0.5% in August.

Oliver Blake, managing director of Your Move and Reeds Rains, said: “The Chancellor will face a difficult balancing act for housing when he comes to do his Budget at the end of this month. He’ll probably be keen to tackle the continuing problems with affordability whilst addressing ways to stimulate the market.”

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