House price inflation has almost halved compared with the last quarter, says Nationwide, as the aver...
House price inflation has almost halved compared with the last quarter, says Nationwide, as the average house is now worth an extra 3.9% since December when previous quarters saw a rise in property prices of 6.5%.
Nationwide's house price inflation figures are 0.5% lower than those published by Halifax on Wednesday, and the average value of a property is also around £5,000 less as Nationwide's average house price is listed as £122,180 for March.
While the bulk of calculations are broadly similar between the two mortgage giants, Nationwide selects its research subjects slightly differently, accounting for the difference.
As a result of a slowing economy and increasing pressure felt by homebuyers trying to purchase such high valued properties, house prices in certain regions are likely to be much lower than originally anticipated, particularly in London and the Midlands.
Nationwide says it expects house prices to rise by around 5% in London, 10% in the Midlands and 15% in the North, compared to current growth rates of 23%, 30% and 35% respectively.
This broadly leaves forecasts for the annual house price rise unchanged at 10% this year, as house prices grew by 1.9% in March, says Alex Bannister, group economist at Nationwide.
However, this is still substantially higher than the 0.4% house price growth in February - even when figures have been seasonally adjusted or reduced to reflect the usual flurry of house sales as weather improves.
"The price of an average property rose by 1.9% in March, compared with a 0.4% rise in February. There has been much speculation about the housing market slowdown in recent months, but our index suggests that house price growth remains buoyant although the trend over the last few months has moderated," says Bannister.
"Prices rose by just under 4% in the first quarter compared with increases of around 6.5% in each of the three previous quarters. Activity has also slowed, with house sales down 5% in the twelve months to February.
"Lower priced regions [are] seeing stronger growth than those where rising house prices have left buyers more stretched. Annual house price growth in London was 23% in the first quarter, slightly up from 21.4% in the fourth quarter of last year. However, London remains in eleventh place (out of 13 regions) in the growth league table. In contrast, the North East saw annual inflation of 36.5% - its highest rate since the third quarter of 1989 (it was also the fourth highest ever figure for the North East)," adds Bannister.
Additional evidence presented by Nationwide concludes bank base interest rates are likely to end the year at its current level of 3.75%, rather than the 4.5% Nationwide previously predicted.
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