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Modest slowdown

House Price Figures


According to the latest figures from the Nationwide Building Society, annual house price growth ended the
year at 2.6%, within the 2-4% range that prevailed throughout 2017. This was in line with their
expectations and broadly consistent with the 3-4% annual rate of increase which the Building Society
expects to prevail over the long term which aligns with their estimate for earnings growth over the
coming years.
This figure though marked a modest slowdown from the 4-6% rates of house price growth recorded
in2016. Low mortgage rates and healthy employment growth continued to support demand in 2017, while
supply constraints provided support for house prices. However, this was offset by mounting
pressureonhousehold incomes, which exerted an increasing drag on consumer confidence as the
year progressed.
For Buy to Let the impact of previous policy changes such as additional stamp duty on second
homes,changes to tax deductibility of landlord expenses and tighter lending criteria meant that
demand from investors remained subdued in 2017.
Rates of house price growth in the south of England has moderated towards those prevailing in
the rest of the country with London demonstrating a particularly marked slowdown. Prices in
the capital fell in annual terms for the first time in eight years, albeit by a modest 0.5%.
London ended the year the weakest performing region for the first time since 2004.