Estate Agent Boards Outside Houses

For the second time this week, data was released pointing to a declining UK housing market.

According to the Nationwide, house prices fell by 0.3 per cent in March. On its own, this is not so significant, even a booming market sees the odd fall, from time to time.

It is just that last month, data from the Halifax also revealed a fall in house prices. This is beginning to feel like a trend.

A recent consumer confidence index from Lloyds Bank indicated that confidence in the housing market has fallen to its lowest level since July 2013.

Meanwhile, the latest English Housing Survey from The Department for Communities and Local Government (DCLG) revealed a further decline in the home ownership rate to 62.9 per cent in 2016 - the lowest recorded since 1985.

Robert Gardner, Nationwide's Chief Economist, said: “There was a mixed picture across the UK in Q1. Six regions saw the pace of house price growth accelerate, six saw a deceleration and one (East Midlands) recorded the same rate as the previous quarter. Interestingly, the spread in the annual rate of change between the weakest and strongest performing regions was at its narrowest since 1978 at 6.8 percentage points – the second smallest gap on record.

“The South of England continued to see slightly stronger price growth than the North of England, but there was a further narrowing in the differential. Northern Ireland saw a slight pickup in annual house price growth, while conditions remained relatively subdued in Scotland and Wales).

Turning to the data on home ownership, Mr Gardner said: “While the last couple of years have seen a slight improvement in the proportion of young adults owning their own home (currently 38 per cent), this remains considerably lower than was the case ten years ago. The data also reveals a significant fall in home ownership rates amongst those aged 35-44 to just 56 per cent (down from 74 per cent in 2006).

“The counterpart to this trend has been robust growth in the private rental sector, with 20 per cent of households in England now privately rented, a record high, up from 12 per cent ten years ago. The number of privately rented households has increased by more than 75 per cent over the past decade and now stands at 4.5 million.”

He added: “It is unclear what is driving the increase in private renting amongst older households. However, it is interesting to note that these age groups have also seen a decline in the proportion of people owning [their home, but] with a mortgage and an increase in those owning their homes outright. This suggests a growing divide between property ‘haves’ and ‘have-nots’.”