House prices in the United Kingdom rose 9.8% in March compared to the same month the previous year, official figures show.
Figures from the Office for National Statistics published today show the rise in March was below the 11.3% and 10.4% annual rises seen in February and January respectively. However, the increase was still the highest it has been in the month of March since 2007, ahead of the global financial crisis.
Growth in London continues to be much slower than the national average at 4.8% year-on-year, while prices in the capital and the east of England fell 0.9% and 0.8% month-on-month respectively.
Lawrence Bowles, director of research at Savills, cautioned that the slowdown in annual growth may have been impacted by higher than usual levels of activity in March last year as people raced to complete purchases ahead of the stamp duty holiday deadline, before it was extended.
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He said: “While affordability pressures tighten and mortgage costs rise, there is one clear driver for the overall deceleration: the stamp duty holiday. Before the Chancellor announced an extension to the stamp duty holiday last March, we saw a rush of buyers trying to secure their purchases before the holiday ended.”
Lucy Pendleton, property expert at estate agency James Pendleton, said the figures suggest that while the market is still “flying”, a contraction may not be too long away. She said the slower growth in London might be the ‘canary in the gold mine’ warning of a slowdown to come.
She said: “Compared with flagging consumer confidence levels, these results are still buoyant, and demand remains ahead of supply, partly thanks to a shortage of new-build properties.”
Nicky Stevenson, managing director at agent Fine & Country, said: “This data indicates that house price correction may be gradual rather than sudden despite the headwinds which are multiplying in the broader economy.
“While the housing market is certainly approaching a crossroads, new instructions remain thin on the ground and supply bottlenecks persist around the country.”