House price growth slows further in April: UK HPI

Average house prices in the UK increased by 1.4% in the year to April, down from 1.6% in March, according to the latest UK House Price Index from the Land Registry and the ONS.

Related topics:  Finance News
Rozi Jones
19th June 2019
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"The market has been recovering a little confidence and equilibrium in 2019, and prices should be growing slowly again by the end of the year."

The figure is supported by strong growth in Wales of 6.7%, up from 3.9% in March 2019. This strengthening in the annual growth rate for Wales is due to both strong growth between March and April (2.4%) and falling prices (0.3%) between March and April 2018. Falling prices last year can be linked to Land Transaction Tax replacing UK Stamp Duty Land Tax in Wales from April 2018.

The average house price in England increased by 1.1% over the year to April 2019, down slightly from 1.3% in March 2019. House prices in Scotland increased by 1.6% in the year to April 2019, down from 3.5% in the year to March 2019.

Northern Ireland house prices increased by 3.5% over the year to Q1.

By region, the lowest annual growth was in London, where prices fell by 1.2% over the year to April 2019, up from a fall of 2.5% in March 2019.

The East Midlands was the English region with the highest annual growth, with prices increasing by 2.9% in the year to April 2019. This was followed by the North West, with prices increasing by 2.6%.

On a non-seasonally adjusted basis, average house prices in the UK increased by 0.7% between March and April, compared with a rise of 1.0% in average prices during the same period a year earlier. On a seasonally adjusted basis, average house prices in the UK saw a monthly fall of 0.2%.

Mike Scott, chief property analyst at Yopa, commented: "The official government House Price Index for April shows a further slowdown in the annual rate of house price growth, with prices up by 1.4% since April 2018. This confirms what we have already seen in other reports that use newer but less complete data, and the rate of increase can be expected to fall further in the coming months.

"However, we do not expect that national average prices will actually start to decrease, since it appears that the market has been recovering a little confidence and equilibrium in 2019, and prices should be growing slowly again by the end of the year. Much of what will be reported in December is already baked in to the market, since the report published in December will relate to completions in October, of sales that were agreed around July, of houses that are coming onto the market and having their asking prices set right now.

"Prices in London are still falling, down by 1.2% for the year, but this is an improvement on the 2.5% annual fall reported last month. London prices may finally be bottoming out, but with affordability still very tight and Brexit uncertainty hitting London harder than the rest of the country, we do not expect London prices to turn around and start to rise again this year."

Lucy Pendleton, founder and director of estate agents James Pendleton, added: “Another drop in property prices in London ensures the capital continues to be a bit of an outlier. Other regions haven’t followed the capital’s trajectory as quickly as has been the case historically.

“Some comfort can be taken from the fact that, as prices in London fall, buyers are being fairly energetic in stepping up to take the opportunity to get in.

“This should not be taken as a sign that we will soon see an outright rebound in prices in the capital but it’s extremely unlikely that this kind of behaviour will give way to more dramatic downward revisions in property values.

“What will precipitate a short-term consolidation is an improvement on the number of homes for sale but any fall in values as a result will likely be brief and muted in percentage terms.”

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