MNI: UK Nationwide House Prices Lower In February

--UK Nationwide Feb house price index -0.3% m/m, 2.2% y/y

     LONDON (MNI) - UK house prices fell in February, falling 0.3% on the month,

with annual gains decelerating to 2.2%, down from 3.2% in January, the

Nationwide House Price Index showed.

     Annual house price growth in the Nationwide series has held in a 2 to 4%

range since March 2017. 

     Nationwide's Chief Economist Robert Gardiner said the fall in prices was

not unexpected after the surprise gains in January.

     "Month-to-month changes can be volatile, but the slowdown is consistent

with signs of softening in the household sector in recent months. Retail sales

were relatively soft over the Christmas period and at the start of the new year,

as were key measures of consumer confidence, as the squeeze on household incomes

continued to take its toll," he said.

     "Similarly, mortgage approvals declined to their weakest level for three

years in December, at just 61,000. Activity around the year end can often be

volatile, but the weak reading comes off the back of subdued activity in October

and November (approvals were around 65,000 per month compared to an average of

67,000 over the previous 12 months). Surveyors report that new buyer enquiries

have remained soft in recent months," he said, repeating comments from January.

     Gardner said a lack of supply continued to underpin the market, although

offset somewhat by rising pressures on household incomes.

     "Housing market activity is anticipated to slow only modestly, since

unemployment and mortgage interest rates are expected to remain low by historic

standards. Similarly, the lack of properties on the market is likely to provide

ongoing support for house prices. Overall, we expect house prices to be broadly

flat, with a marginal gain of around 1% over the course of 2018," he said.  

     Going forward, Gardner thought the continued squeeze on household budgets,

along with Brexit issues, would weigh on further house price growth.

--MNI London Bureau; tel: +44 203-586-2225; email: les.commons@marketnews.com

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