House prices show longest sustained fall since 2009 crash


Prices have fallen for three months in a row, Nationwide data shows

House prices fell for a third month in a row in May, registering the biggest sustained decline since the post-crisis slump of 2009.
The data, from Nationwide Building Society, saw prices across the country dropping by 0.2 percent month-on-month in May. This followed falls of 0.2pc and 0.3pc in April and March respectively. House prices are still a narrow 2.1pc higher than at this time last year, but this figure is the smallest measure of growth in four years. Nationwide said the data "provides further evidence that the housing market is losing momentum". The lender's economist Robert Gardner said "Moreover, this may be indicative of a wider slowdown in the household sector, though data continues to send mixed signals in this regard." It attributed the weakening in the market to uncertainty around Brexit and the election as well as a rise in living costs and an affordability squeeze caused by historically high prices relatives to incomes. But "subdued" building would limit supply to the market and could provide support, Mr Gardner said. He cited high levels of employment as further support. While real incomes are again coming under pressure as inflation has overtaken wage growth, the number of people in work has continued to rise at a healthy pace. Indeed, the unemployment rate fell to a 42-year low in the three months to March. The election was not likely to be a major factor in the market, he said. If history is any guide, the slowdown is unlikely to be linked to election-related uncertainty. Housing market trends have not traditionally been impacted around the time of general elections. Rightly or wrongly, for most home buyers, elections are not foremost in their minds while buying or selling their home. House prices stabilised in recent years after prolonged monthly declines in the 2008-2009 post-financial crisis years. The majority of monthly changes in the past three years have shown growth (see graph, below).
Russell Quirk of online agency eMoov said: "Nationwide havs been quick to highlight that previous elections have had little impact on traditional house price trends. "It's fair to say, however, that previous years were more routine than a snap election called in the middle of negotiations to leave the EU. "House prices, along with the gap when compared to earnings, have continued to increase and such a pattern is unsustainable in the long term."
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Latest official house price data, which is based on Land Registry prices and so tends to lag data from lenders such as Nationwide, shows a widening split in the price performance across different regions of Britain.
 Source: 02/06/2017

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