The latest House Price Index from Nationwide has revealed that annual UK house price growth slowed down in February this year, falling from 3.2% in January to 2.2%. Average house prices also fell by 0.3% over the month. 

The average price in February 2018 stood at £210,402, which is a slight fall over the previous month’s average of £211,756.

“Month-to-month changes can be volatile, but the slowdown is consistent with signs of softening in the household sector in recent months,” explained Robert Gardner, Nationwide's Chief Economist. “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.”

“How the housing market performs in the year ahead will be determined in large part by developments in the wider economy and the path of interest rates,” he said. “Brexit developments will remain a key factor, though these remain hard to foresee. We continue to expect the UK economy to grow at modest pace, with annual growth of 1% to 1.5% in 2018 and 2019. Subdued economic activity and the ongoing squeeze on household budgets is likely to exert a modest drag on housing market activity and house price growth.”

“Nevertheless, housing market activity is anticipated to slow only modestly, since unemployment and mortgage interest rates are expected to remain low by historic standards,” he added. “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.”

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