Recent figures suggest that house prices are set to slow during 2017. Property prices grew by 5.7% in the year to the end of January, slower than the annual growth of 6.5% in the previous month.
In January, the average UK home was valued at £220,260. Whilst prices in the three months to the end of January were higher than in the previous three months, the figures show that in comparison to the same period one year before, growth was beginning to slow, coming in considerably lower than the 10% peak of March 2016. In fact, compared to December 2016, prices in January 2017 dropped by 0.9%. The figures mean that the property industry now has a decidedly mixed outlook for the year ahead.
“January is always a lethargic month for UK property as a result of the Christmas break”, said founder of eMoov.co.uk Russell Quirk, “and so any fall in house prices at this time of year should be taken with a pinch of salt, rather than a handful of panic. Had any other market around the world been subject to such a sustained period of scaremongering and uncertainty amongst buyer and seller as the UK market has in the last year, I expect it would be a different story to the one we are seeing here.”
However, some estate agents have warned that concerns over rising inflation and the effect it will have on both interest rates and general living costs are impacting upon the decisions the UK public is making regarding buying and selling property. There are also worries over the tightening of mortgage criteria, as well as the focus on affordability.
Whilst prices have been kept up by both lower rates of interest and the relatively small number of houses on the market, other factors will work to slow price growth throughout this year. These are likely to include the weakening of economic growth, the increasing pressure felt on spending power and restrictions to affordability, making the outlook for the property market in 2017 considerably uncertain.