Mortgage Advice Bureau : Nationwide House Price Index January 2018

Andy Frankish, Director of Mortgage Advice Bureau comments on the Nationwide House Price Index:

'The report issued by the Nationwide this morning is based on lending for house purchases at post survey approvals stage, so provides us with a reliable indication of the UK housing market in December from one of the country's biggest mortgage lenders.

According to the data, now the 'scores are on the doors' for 2017 as a whole we can see that the UK housing market performed to expectations, with the overall annual rate of growth at 2.6% which was within the 2% to 4% annual growth figure projected by the Nationwide at the beginning of last year. Of course, within this we have seen a changeable picture of higher rates of growth in certain areas, such as the North and the Midlands, together with prices coming off the boil in London and the South East and the Capital losing its crown in terms of being the top performing region. In fact, looking at the breakdown we can see that the West Midlands was the top performer in terms of regional house price growth last year, with an average annual rise of 5.2%, closely followed by the South West with a year on year increase of 4.8%, with London at the bottom of the 'league table' showing an average 0.5% annual drop in prices. Having said that, the report does also suggest that London house prices are still approximately 55% above their 2007 levels, whilst values in the North are still lower than their previous highs of a decade ago.

Of course, we are entering into 2018 with a similar set of challenges to last year; deposits required to purchase are significantly higher than they were a decade ago, representing increased difficulty for first time buyers in general but particularly around the Capital, and available stock levels remain at all-time low levels, providing little choice for buyers in many areas. This together with ongoing Brexit negotiations, slowing wage growth and another signposted interest rate increase within the next 12 months has led to the Nationwide suggesting that annual growth in 2018 will remain subdued at between1% and 1.5%, although still in positive territory. Having said this, it's possible to suggest that as with last year, within the overall average we'll see regional variations, with some areas performing better than others over the course of the next 12 months. However, what this morning's data does tell us is that, all things considered, we're going into 2018 with the market currently holding steady, which should get the new year off on a sound footing.'

Please don't hesitate to get in touch with us if you have any queries and our team of expert mortgage advisers will be happy to help.