UK house price growth slows may slow 2017 but long term trend is strong
UK house price growth slowed a little in January 2017, according to Halifax, part of Lloyds Banking Group. Property prices rose by 5.7% in the year to the end of January 2017 which is slower than the 6.5% annual growth seen the previous month.
Across the UK, the average house price stands at £220,260 – 5.7% higher than a year earlier.
The annual rate of house price growth has eased to around half the rate of that seen last spring. In March 2016, house prices were climbing by 10% year on year.
On a quarterly basis, house prices between November 2016 and January 2017 were 2.4% higher than during the previous three months.
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UK house price growth – experts’ view
Martin Ellis, a housing economist, said: “The quarterly and annual rates of house price growth remain robust even though they are lower than in spring 2016.
“UK house prices continue to be supported by an ongoing shortage of property for sale, low levels of house-building, and exceptionally low interest rates.
“These factors are unlikely to change materially during 2017. 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.”
Howard Archer, chief UK and European economist at IHS Global Insight, said of the 0.9% price dip: “January’s correction in house prices reported by the Halifax fuels our belief that house price gains over 2017 will be no more than 3%.
“We suspect that housing market activity and prices will come under increasing pressure as 2017 progresses from weakening fundamentals.”
But Mr Archer said prices are likely to be held up by a shortage in supply.
Government hosing strategy
This UK house price growth is likely to be affected in the newly announced Government housing strategy.
The measures include the following:
- Forcing councils to produce an up-to-date plan for housing demand
- Expecting developers to avoid “low-density” housing where land availability is short
- Reducing the time allowed between planning permission and the start of building from three to two years
- Using a £3bn fund to help smaller building firms challenge major developers, including support for off-site construction, where parts of buildings are assembled in a factory
- A “lifetime ISA” to help first-time buyers save for a deposit
- Maintaining protection for the green belt, which can only be built on “in exceptional circumstances”
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Further reading
UK house price growth ‘to slow in 2017’
House prices show first fall in five months but long term growth is robust