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Annual house price growth in the UK slowed to 5.7% in February from 6.8% in January, the sixth month in a row that it has slowed, the latest index figures show. UK house prices fell by 0.1% in February, taking the average price to £187,964, according to the data from the Nationwide Building Society. According to Robert Gardner, Nationwide's chief economist, the broader economic backdrop has remained supportive of housing market activity. ‘Mortgage rates remain close to all-time lows and consumer confidence remains buoyant thanks to a further steady improvement in labour market conditions,’ he said. ‘Indeed, the unemployment rate has continued to decline and earnings growth has picked up, particularly in inflation adjusted terms, thanks in part to the sharp decline in energy prices,’ he added. But he pointed out that the pace of housing market activity remains fairly subdued. ‘There was a small increase in the number of mortgages approved for house purchase in December, up 2% from 59,000 in November to 60,300 in December, though it remains too early to determine whether this marks a turning point in activity,’ he concluded. The UK property market is undergoing a sustained reality check, according to Alex Gosling, chief executive officer of online estate agents House Simple. But he believes it is far too premature to suggest that the property market is running out of steam. ‘The strong jobs market, rising real wages and cheap credit are fuelling consumer confidence, and for many renters the home owning dream remains as attractive as ever. But the fillip provided by the Stamp Duty reforms announced late last year appears to be waning, and mortgage activity is fairly subdued,’ he explained. ‘Tightened lending criteria are forcing first time buyers to save much more and much longer before they can get a mortgage. The most recent English Housing Survey found that just 36% of 25 to 34 year olds own their home, compared to 59% a decade before,’ he pointed out. ‘Steady, not stellar, growth is likely to be the pattern for house prices in 2015. The double digit rises of 2014 are history,’ he added. Continue reading →
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