Agents cautious over latest 'quietly encouraging' house price index

Agents have given a cautious welcome to the latest index from the Nationwide, suggesting that the annual rate of price growth remains stable at the start of 2017. 

“The annual rate of house price growth remained broadly stable at the start of 2017 at 4.3 per cent, only modestly below the growth rate in December of 4.5 per cent” says Robert Gardner, Nationwide's chief economist. 

He says notwithstanding the relatively stability of price growth, uncertainty surrounds the market as the year begins.

“On the one hand, there are grounds for optimism. The economy has remained far stronger than expected in the wake of the Brexit vote. Recent data indicates that the economy didn’t slow in the second half of 2016 and the unemployment rate remained stable at an 11-year low in the three months to November.

“However, there are tentative signs that conditions may be about to soften. Employment growth has moderated, and while wage growth has edged up in recent months, in real terms - that is, after adjusting for inflation - earnings growth has already slowed. With inflation set to rise further in the months ahead as a result of the weaker pound, real wages are likely to come under further pressure” he adds. 

He says price growth over the year is likely to be minimal - around two per cent.

Jeremy Leaf, north London estate agent and a former RICS residential chairman, is wary as to the significance of the most recent price figures, saying that while they appear encouraging they reflect activity in the quieter pre-Christmas period. 

“What we found at the coalface during that time was a little more optimism in the market in terms of sentiment but sadly still not enough supply and not the quantity of buyers we saw in the early to middle part of last year. The result is a steady, more balanced market where prices are likely to be more sensitive in areas which overheated previously” he says.