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Slow Growth for UK House Prices in 2017

The Halifax, part of the Lloyds Banking Group, said that annual growth in property prices experienced a slowdown in January and the trend is expected to continue throughout the year.

House prices went up by 5.7% in the year to end of January, which is less than the 6.5% yearly growth recorded in December.

These figures were issued on a day that the new Government housing strategy was being revealed. They also come a week after the Nationwide Building Society, a rival lender,  said that the UK housing market’s future looked ‘clouded’.

Nationwide stated that it’s data suggested that property prices in the three months prior to January 31 were actually higher by 2.4% compared to the prior three months. Compared to the previous year, however, price growth was beginning to slow down and missed the 10% peak of March 2016 by a wide margin.

Compared with December, January prices dropped by 0.9%, which resulted in a murky view of the industry’s immediate future.

eMoov.co.uk founder Russell Quirk said that UK property prices are usually lethargic after the holiday break, so any reduction in values should be taken with a pinch of salt.

Mr. Quirk said that if any other market across the globe been subject to such an unbroken period of fear and uncertainty between buyers and sellers as the UK property market has been in recent months, it would be a different story to the one currently being seen.

 

Specialists in Construction Insurance

North London estate agent Jeremy Leaf said that the figures revealed a market slowdown in response to a variety of factors. Concerns over rising inflation and its effect on interest rates and living costs, as well as more stringent mortgage criteria and the emphasis on affordability were affecting decisions.

Comparatively few homes on the market, combined with low interest rates, were keeping house prices high, according to the Halifax, but other factors would contribute to a 2017 slowdown.

The Halifax housing economist Martin Ellis said that reduced economic growth and more pressure on spending power, combined with affordability problems, were expected to have a sobering effect on housing demand and reduce prices overall during the year.

The lender added that the number of first-time buyers went up 7% in 2016, but was still 17% lower than the pre-crisis peak reached in 2006.

 

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