Growth in UK house prices slowed to 3.8% in March 2017, its slowest annual rate since May 2013. Buyers appear to be cautious in the face of inflationary pressures and post-Brexit vote concerns.
The latest study by Halifax Markit reveals the year-on-year slowdown. The February on February figure was 5.1%.
But experts remain largely positive on Britain's property prices despite average house prices barely moving so far in 2017. Growth of just 0.1% was reported by Halifax Markit for the first three months of this year.
‘The supply of both new homes and existing properties available for sale remains low,’ says Halifax housing economist Martin Ellis.
‘This, together with historically very low mortgage rates, is likely to support house price levels over the coming months,’ Ellis says.
WHY DEMAND IS LOWER
Income growth has failed to keep up with a period of rapid house price growth, which has made it difficult for new buyers, especially, to get a foot on the housing ladder.
Investors in UK-quoted housebuilders have so far taken the latest findings in their stride. The share prices of Persimmon (PSN), Barratt Developments (BDEV) and Bellway (BWY) - three of the largest - are largely flat on Friday (7 April).
GROWTH WILL RECOVER
Property Partner investments director Rob Weaver is not alarmed by the slower growth either. He says that the ‘fundamentals that underpin the market are still there and are very solid, which continues to make residential a compelling investment.’