‘Housing demand appears to have been curbed in recent months due to the deterioration in housing affordability caused by a sustained period of rapid house price growth during 2014-16 .’ — Martin Ellis, Halifax
A monthly report released by IHS Markit showed that change of house prices in the UK did not justify analysts’ expectations. While majority of experts anticipated an increase of 0.1% in April, the revealed data showed the opposite result. Despite the minor fluctuations, UK house prices, in general, remained unchanged for the last three months. The reason behind price stagnation is partly based on the fact that the dynamics of home sales in March and April was very similar to January and February, and remained in line with the two-year average. In addition, experts referred to the deficit of supply in the market, as the number of houses available for purchase fell for the 13th consecutive month. In a more general context, a decrease in the pace of job creation as well as rising inflation also reduced consumers’ ability to acquire new houses. On the other hand, analysts noted that confidence in the UK housing market is gradually improving, following a record fall after the Brexit referendum in June 2016. This fact in conjunction with very low mortgage interest rates should offset the abovementioned constraints and slightly raise housing prices.
