Annual UK house price growth has moved into negative territory for the first time since June 2020, Nationwide building society said this morning.
The average price of a home declined by 1.1% year on year to £257,406 in February, the weakest rate since November 2012. In January, the annual rate showed 1.1% growth.
Prices fell 0.5% compared with January, after a 0.6% drop the month before. It was the sixth monthly decline in a row, and left prices 3.7% below their peak in August.
Robert Gardner, Nationwide’s chief economist, said: "The recent run of weak house price data began with the financial market turbulence in response to the mini-budget at the end of September last year. While financial market conditions normalised some time ago, housing market activity has remained subdued.
"This likely reflects the lingering impact on confidence as well as the cumulative impact of the financial pressures that have been weighing on households for some time. Indeed, inflation has continued to outpace wage growth, and mortgage rates remain significantly higher than the lows recorded in 2021. Even though consumer sentiment has improved in recent months, it is still languishing at levels prevailing during the depths of the financial crisis.
"It will be hard for the market to regain much momentum in the near term since economic headwinds look set to remain relatively strong, with the labour market widely expected to weaken as the economy shrinks in the quarters ahead, while mortgage rates remain well above the lows prevailing in 2021."
In another sign that the housing market has slowed sharply, Persimmon, one of the UK’s biggest housebuilders, warned of lower profits this year and slashed its dividend by 75%. It made an underlying pre-tax profit of £1.01bn last year, up 4%.
The latest quarterly FTSE reshuffle is expected to lead to the greeting cards retailer Moonpig and the betting firm 888 being relegated from the FTSE 250 index to the FTSE small cap.
The Scottish sausage skin manufacturer Devro may briefly enter the FTSE 250 after “a banger of a performance for shares”, which soared after a cash offer for the company, said Susannah Streeter, the head of money and markets at Hargreaves Lansdown. The results of the reshuffle, based on yesterday’s closing prices, will be announced later today.
The Bank of England governor, Andrew Bailey, will be speaking at a cost of living conference organised by the Brunswick Group and hosted at Coin Street Social Enterprise in London later this morning.
The agenda
• 8.15am GMT – 8.55am GMT: Spain, Italy, France and Germany S&P Global manufacturing PMIs for February
• 8.55am GMT: Germany unemployment for February
• 9am GMT: eurozone S&P global manufacturing PMI final for February
• 9.30am GMT: UK mortgage approvals and consumer credit for January
• 9.30am GMT: UK S&P global manufacturing PMI final for February
• 10.10am GMT: speech by Bank of England's governor, Andrew Bailey
• 11am GMT: Italy GDP growth for 2023 (previous: 6.6%)
• 1pm GMT: Germany inflation for February
• 3pm GMT: US ISM manufacturing PMI for February (forecast: 48)
We’ll be tracking all the main events throughout the day ... |
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