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UK house prices fall again in April, says Nationwide

By Oliver Haill

Date: Friday 28 Apr 2017

UK house prices fall again in April, says Nationwide

(ShareCast News) - UK house prices have fallen for the second month in a row, with annual growth slowing to a near four-year low.
House prices fell 0.4% in April compared to March, according to an index produced by building society Nationwide.

In April house prices were 2.6% higher than in April last year, down from the 3.5% annual growth seen a month ago.

The annual rate of growth was the weakest since June 2013, said Robert Gardner, Nationwide's chief economist, who added that the slowdown may be part of a broader trend, mirroring the fall in retail sales growth in recent months.

"In some respects, the softening in house price growth is surprising because the unemployment rate is near to a 40-year low, confidence is still relatively high and mortgage rates have fallen to new all-time lows in recent months.

"While monthly figures can be volatile, the recent softening in price growth may be a further indication that households are starting to react to the emerging squeeze on real incomes or to affordability pressures in key parts of the country," he said.

Economist Howard Archer from IHS Markit said April's second successive drop in house prices from Nationwide provided "compelling evidencethe housing market is being increasingly affected by the increasing squeeze on consumers and their concerns over the outlook".

"We suspect markedly weakening consumer fundamentals, likely mounting caution over making major spending decisions, and elevated house price to earnings ratios will weigh down further on housing market activity and house prices over the coming months," he said, cutting his forecast for house price gains over 2017 to 2.0%.

However, he said the shortage of housing supply was likely to keep a floor under prices.

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