A report issued by the Nationwide this morning suggests the UK property market performed as expected in 2017, with a league table of regional values seeing the West Midlands topping growth charts, with London languishing at the bottom as the Capital saw prices cooling.
- Home prices in London decreased for the first time in eight years
- Policy changes kept investor demand subdued in 2017
- Affordability is a pervasive issue in the UK housing market
Some regions have performed significantly above the average, with the West Midlands reportedly seeing an annual increase of 5.2 per cent over the last twelve months, and the South West also seeing growth of 4.8 per cent.
But whilst these areas are booming, London has officially slid into decline, with the figures showing a 0.5 per cent annual decrease in property values in the Capital.
However, prices in London are still approximately 55 per cent above 2007 levels, whilst those in the North remain lower than their 2007 peaks, although this will still see many buyers stretched to their limits when purchasing their next home.
“Low mortgage rates and healthy employment growth continued to support demand in 2017, while supply constraints provided support for house prices, but this was offset by mounting pressure on household incomes, which exerted an increasing drag on consumer confidence as the year progressed,” said Robert Gardner, chief economist at Nationwide.
“The impact of previous policy changes, including additional stamp duty on second homes, and changes to tax deductibility of landlord expenses and lending criteria, meant that demand from Buy to Let investors remained subdued in 2017.”
“London saw a particularly marked slowdown, with prices falling in annual terms for the first time in eight years, and ended the year as the weakest performing region for the first time since 2004,” Gardner said.
A key aspect of house price growth is of course affordability, with the deposit required and the time taken to save it a driving factor.
According to the Nationwide, a 20 per cent deposit in London is now in excess of £80,000, based on the average First Time Buyer house price.
Robert Gardiner added: “In most regions, it would take around eight years for the typical buyer to save for a deposit. This rises to nine years in the South East and to nearly ten years in London, even though the prospective typical buyer in the capital is in the top 10 per cent of income distribution.”
View the original article at Express UK