Decline in mortgage approvals reaches 3-year low in December
The latest house price index reveals the housing market softened in February, with prices declining moderately by 0.3% on a monthly basis.
Following a strong start to the year, annual house price growth eased from 3.2% in January to 2.2% in February, bringing the average price of a house on a non-seasonally adjusted basis to £210,402 according to Nationwide’s data.
Mortgage approvals in December declined to 61,000, their weakest level for three years, after subdued activity in October and November resulted in approximately 65,000 approvals per month, compared to an average of 67,000 over the previous 12 months.
In their report, Nationwide reaffirms their initial annual house price growth prediction of around 1% in 2018, keeping pace with their projections for the UK’s economic growth of 1-1.5% over the next two years.
However, Nationwide’s chief economist Robert Gardner believes the country’s low supply will continue to keep house prices aloft, saying: “Nevertheless, housing market activity is anticipated to slow only modestly, since unemployment and mortgage interest rates are expected to remain low by historic standards.
“Similarly, the lack of properties on the market is likely to provide ongoing support for house prices.”
In order to tackle the UK’s housing undersupply, Housing Minister Dominic Raab announced a £15.8m fund to allow councils to process more planning applications.