House Price Figures
According to the latest figures from the Nationwide Building Society, annual house price growth ended theyear at 2.6%, within the 2-4% range that prevailed throughout 2017. This was in line with theirexpectations and broadly consistent with the 3-4% annual rate of increase which the Building Societyexpects to prevail over the long term which aligns with their estimate for earnings growth over thecoming years.This figure though marked a modest slowdown from the 4-6% rates of house price growth recordedin2016. Low mortgage rates and healthy employment growth continued to support demand in 2017, whilesupply constraints provided support for house prices. However, this was offset by mountingpressureonhousehold incomes, which exerted an increasing drag on consumer confidence as theyear progressed.For Buy to Let the impact of previous policy changes such as additional stamp duty on secondhomes,changes to tax deductibility of landlord expenses and tighter lending criteria meant thatdemand from investors remained subdued in 2017.Rates of house price growth in the south of England has moderated towards those prevailing inthe rest of the country with London demonstrating a particularly marked slowdown. Prices inthe 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.