House price growth drops to seven-month low with London and Scotland worst affected areas
The average cost of buying a home now stands at £211,792, and despite London being the worst performing English region, the average house price still stands at a whopping £473,776
ANNUAL house price growth fell to a seven-month low in March, according to new data from Nationwide.
Across the UK, average prices increased by 2.1 per cent year-on-year, marking the weakest annual growth seen since August 2017.
And again, London was the weakest performing, with prices down 1 percent compared to a year ago.
Prices in the capital though are still way above any other parts of the country, with the average cost of a home costing £473,776.
That compares to an average house price of £211,792 in the UK.
On a monthly basis, prices dipped for the second month in a row, with the building society blaming "subdued consumer confidence" for the fall.
A 0.2 per cent month-on-month decrease in March came after a 0.4 per cent fall in February.
Robert Gardner, Nationwide's chief economist, said: "On the surface, the relatively subdued pace of house price growth appears at odds with recent healthy rates of employment growth, a modest pick-up in wage growth and historically low borrowing costs.
"However, consumer confidence has remained subdued, due to the ongoing squeeze on household finances as wage growth continues to lag behind increases in the cost of living.
"Looking ahead, much will depend on how broader economic conditions evolve, especially in the labour market, but also with respect to interest rates."
Northern Ireland recorded the strongest annual house price growth in the first quarter of 2018, with a 7.9 per cent increase taking the average price there to £137,965.
Average house prices in Northern Ireland are still 38 per cent below 2007 levels, compared with the UK generally where house prices are 16 per cent above pre-crisis levels on average.
Wales had the second strongest annual growth, with a 6.1 per cent increase pushing average prices to £151,971.
The 6.1 per cent annual increase was the strongest seen in Wales since 2014.
The West Midlands had the strongest price growth among the English regions, with prices up 4.9 per cent year-on-year to reach £184,727 on average.
After London, the next weakest growth was in Scotland, where prices were 0.2 per cent higher than a year earlier, standing at £144,250 on average in the first quarter of 2018.
Mr Gardner added: "Over the past two years the southern English regions have seen a steady deceleration in price growth, which is now running at its slowest pace since 2012.
"By contrast, the northern English regions have recorded a gradual acceleration and recorded their strongest growth rate since 2014 in the first three months of this year."
Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said the figures provide "more evidence that even the relatively modest increase in mortgage rates seen over the last six months has hit the market hard".
Mr Tombs said: "Record high loan-to-income ratios mean that home buyers will have to put a much larger share of their incomes towards loan payments merely to take out mortgages of the same size as those who have just bought a home.
"As a result, the scope for further increases in house prices driven by rising leverage is extremely limited."
A shock report last month from the Institute of Fiscal Studies revealed there has been a huge collapse in home ownership for those on middle incomes in the last 20 years due to soaring prices and stagnant wages.
Just over a quarter (27 per cent) of those aged between 25 and 34 earning between £22,200 and £30,000 own their own place, compared to 65 per cent in 1996.
What help is out there for first-time buyers?
GETTING on the property ladder can feel like a grim task but there are schemes out there to help first-time buyers own their own home.
Help to Buy ISA - It's a tax-free savings account where for every £200 you save, the government will add an extra £50. But there's a maximum limit of £3,000 which is paid to your solicitor when you move.
Help to Buy equity loan - The government will lend you up to 20 per cent of the home's value - or 40 per cent in London - after you've put down a five per cent deposit. The loan is on top of a normal mortgage but it can only be used to buy a new build property.
Lifetime ISA - Another government scheme that gives anyone aged 18 and 39 the chance to save tax-free and get a bonus of up to £32,000 towards your first home. You can save up to £4,000 a year and the government will add 25 per cent on top.
Shared ownership - Co-owning with a housing association means you can buy a part of the property and pay rent on the remaining amount. You can buy anything from 25 to 75 per cent of the property but you're restricted to specific ones.
"First dibs" in London - London Mayor Sadiq Khan is working on a scheme that will restrict sales of all new-build homes in the capital up to £350,000 to UK buyers for three months before any overseas marketing can take place.
Starter Home Initiative - A government scheme that will see 200,000 new-build homes in England to be sold to first-time buyers with a 20 per cent discount by 2020. To receive updates on the progress of these homes you can register your interest .
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