Brian Murphy, Head of Lending for Mortgage Advice Bureau comments:
“The report released by the Halifax this morning suggests that house price growth has stalled in the first month of 2018, with an annual increase of 2.2% but a month on month decline of 0.6%. Whilst that may start to ring alarm bells, it’s probably a realistic reflection of a combination of increased upwards pressure on house prices due to lack of stock over a long period – nearly two years – causing prices in many areas to ‘top out’ due to buyer affordability.
That said, it’s perhaps worth bearing in mind that the Halifax and other indices have forecast that this year will be flat in terms of price growth with a projected figure of between 0% and 3% and the number of transactions holding at or around the total number for last year, which would then contextualise a headline figure of over two percent annual growth as absolutely within market expectations, given the current economic climate.
Given that we’ve been in a current cycle for the last two years which has seen record low levels of available properties to purchase in many areas, versus the highest levels of First Time Buyers in recent years – who now account for half of all property purchases with a mortgage – there are current specific factors at play that could possibly contribute towards a more divergent market this year, both in terms of regions which may see differing levels of house price growth but also ‘micro markets’ within those regions where perhaps demand for certain types of homes outstrips supply. However, it’s also possible that the market may settle down should an increased number of sellers decide to list their properties for sale over the Spring.”
