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UK houses register first price decline in nearly five years


Average rents in London have fallen by 1.2pc since last year

Average rents in London have fallen by 1.2pc since last year

Average rents in London have fallen by 1.2pc since last year

UK house prices recorded their first quarterly decline in more than four years, adding to signs that its property market is cooling.

In the three months to April, prices fell 0.2pc compared with the previous three months, lender Halifax said in a report last Monday. In April alone, prices slipped 0.1pc, meaning they haven't risen for the past four months.

Almost every UK gauge is now pointing to a housing slowdown. Annual growth based on data from Nationwide Building Society is at the weakest in almost four years, while gains in asking prices for homes have also lost momentum.

Mortgage approvals fell to a six-month low in March, according to the Bank of England.

Halifax said that in the three months through April, prices rose 3.8pc compared with a year earlier, less than half the 10pc rate reached in early 2016.

Huge gains in house prices in recent years - a time of weak wage growth - have pushed home ownership out of reach for many, which Halifax says has curbed demand. Still, with shortage of supply also an issue in the UK market, that's providing some support to prices.

"Signs of a decline in the pace of job creation, and the beginnings of a squeeze on household finances as a result of increasing inflation, may also be constraining the demand," said Halifax housing economist Martin Ellis.

The average rent paid in April for new lettings in Greater London meanwhile was Stg£1,519 (€1,809) a month, a 1.2pc annual decline, HomeLet, the UK's largest reference-checking and rentals insurance company, said last Monday. Annual rental inflation across the UK was 0.4pc in the same period, the lowest in seven years.

"Rents have been rising at a more modest pace across the whole of the UK in recent months," HomeLet chief executive officer Martin Totty said. "We continue to see landlords and letting agents weighing tenant affordability considerations very seriously."

London's housing market is weakening amid affordability issues, new taxes and preparations for Brexit. Landlords rushed to buy homes before the introduction of a new stamp duty sales tax in April of last year, boosting supply and leading to greater competition for tenants.

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The number of tenancies agreed at Stg£1,000 to Stg£5,000 a week fell 3.7pc in the first quarter from a year earlier, Knight Frank said last Friday. Demand in that segment of the market usually comes from senior executives in industries including financial services, the broker said.


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