Slowdown in annual house price growth – but strong demand continues

Nationwide and Rightmove report falls in annual house price growth

This week saw both Nationwide and Rightmove publish their house price indices for April, with both revealing that annual house price growth is showing signs of slowing.

Nationwide reported that the average property value has risen 12.1% over the twelve months to April, down from 14.3% in March. The average house price rose by 0.3% in the month, to £267,620.

Meanwhile, Rightmove revealed that house prices grew by 9.9% over the past twelve months to an average value of £360,101 – down from 10.4% in March. However, the property website also reported that properties are selling twice as quickly as in 2019, with 53% of properties selling at or over the full asking price.

Nationwide also reported that mortgage approvals are continuing to run above pre-Covid levels, with the housing market being supported by strong employment growth. Interestingly, their latest research also revealed that the ‘race for space’ experienced during the pandemic, where households were moving away from cities to more rural areas, seems to have declined substantially.

We continue to expect the housing market to slow in the quarters ahead. The squeeze on household incomes is set to intensify with inflation expected to rise further, perhaps reaching double digits in the quarters ahead if global energy prices remain high.

ROBERT GARDNER, CHIEF ECONOMIST, NATIONWIDE

Persimmon and Taylor Wimpey perform in line with expectations

Both Persimmon and Taylor Wimpey published updates to the City this week.

Persimmon revealed that private sales prices had risen by 2%, and that – although they were starting the year with a relatively low number of sites, at 270 – they are planning on opening 75 new developments this year, subject to achieving “timely planning consents”.

The volume developer also achieved a five-star HBF rating for the first time in its history.

Meanwhile, Taylor Wimpey published similarly strong results, as Jennie Daly succeeds Pete Redfern as CEO.

Revealing that healthy sales revenue growth was continuing to offset labour and material inflation, the developer also reported that the recent interest rate rises had not affected customer appetite.

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