Latest index shows pace of house price growth is still slowing across the UK.
House price growth has slowed for the fifth consecutive month, according to the latest figures from Nationwide.
UK house prices rose by just 0.3% between December and January, pushing the annual rate of increase down from 7.2% to 6.8%.
Nationwide says the average price of a home in the UK has dropped from £188,559 to £188,446.
House price growth
Here’s how prices have changed over the past 12 months, according to the Nationwide House Price Index.
|
|
Monthly change % (seasonally adjusted) |
Annual % change |
Average house price |
|
January 2014 |
0.8% |
8.8% |
£176,491 |
|
February 2014 |
0.8% |
9.4% |
£177,846 |
|
March 2014 |
0.5% |
9.5% |
£180,264 |
|
April 2014 |
1.2% |
10.9% |
£183,577 |
|
May 2014 |
0.7% |
11.1% |
£186,512 |
|
June 2014 |
1.0% |
11.8% |
£188,903 |
|
July 2014 |
0.2% |
10.6% |
£188,949 |
|
August 2014 |
0.8% |
11.0% |
£189,306 |
|
September 2014 |
-0.1% |
9.4% |
£188,374 |
|
October 2014 |
0.6% |
9.0% |
£189,333 |
|
November 2014 |
0.3% |
8.5% |
£189,388 |
|
December 2014 |
0.2% |
7.2% |
£188,559 |
|
January 2015 |
0.3% |
6.8% |
£188,446 |
Source: Nationwide
Why is this happening?
Nationwide says further moderation is unsurprising given the slowdown in housing market activity in recent months.
The building society reports the number of mortgages approved for house purchase is around 20% below the level seen at the start of 2014 and there has been a lack of new buyer enquiries.
However, even though house price growth continues to outpace income growth, affordability does not appear to be stretched at a national level, the building society says.
The cost of paying off a typical mortgage remain close to the long term average thanks to record low mortgage rates.
Robert Gardner, Nationwide’s Chief Economist, says a lack of new homes is keeping prices up despite demand dipping.
The number of new homes built in England was up 8% in the year to Q3 2014, but this is still 34% below pre-crisis levels and only half what is expected in the years ahead.
Gardner says: "If the economic backdrop continues to improve as we and most forecasters expect, activity in the housing market is likely to regain momentum in the months ahead."
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