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Yorkshire house prices have a buoyant first quarter

Annual house prices rose by 4.1 per cent in Yorkshire in the first quarter of this year. Picture: Homes on Redrow's Devonshire Gardens site in Harrogate.
Annual house prices rose by 4.1 per cent in Yorkshire in the first quarter of this year. Picture: Homes on Redrow's Devonshire Gardens site in Harrogate.
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House price growth if steady but home ownership is falling.

UK annual house price growth remained steady at 2.1 per cent in March, according to the latest Nationwide index.

London was the weakest performing region, with house prices down one per cent year-on-year. Northern Ireland was the strongest performing region in the first quarter, with annual price growth accelerating from two per cent in 2017 to 7.9 per cent. Yorkshire also had a buoyant first quarter with prices up by 4.8 per cent compared to 1.8 per cent over the same period last year. After slipping in the recession, house prices in Yorkshire are now back to their 2007 peak.

Commenting on the figures, Robert Gardner, Nationwide's Chief Economist, said: “UK house price growth remained broadly stable in March at 2.1 per cent, little changed from the 2.2 per cent recorded the previous month. House prices fell by 0.2% over the month, after taking account of seasonal factors.

“On the surface, the relatively subdued pace of house price growth appears at odds with recent healthy rates of employment growth, a modest pick-up in wage growth and historically low borrowing costs. However, consumer confidence has remained subdued, due to the ongoing squeeze on household finances as wage growth continues to lag behind increases in the cost of living.

“Looking ahead, much will depend on how broader economic conditions evolve, especially in the labour market, but also with respect to interest rates. Subdued economic activity and the ongoing squeeze on household budgets is likely to continue to exert a modest drag on housing market activity and house price growth this year.

“But historically low unemployment and mortgage interest rates together with the lack of properties on the market is likely to provide some support for house prices. Overall, we expect house prices to be broadly flat, with a marginal gain of around one per cent over the course of 2018."

For the fourth quarter in a row, regions in the North of England recorded stronger annual house price growth than those in the South.

Mr Gardner said: “Over the past two years the Southern English regions have seen a steady deceleration in price growth, which is now running at its slowest pace since 2012. By contrast, the Northern English regions have recorded a gradual acceleration and recorded their strongest growth rate since 2014 in the first three months of this year.

“However, these trends have so far made only small inroads in narrowing the North-South divide. House prices in the North of England are, on average, still less than half of those prevailing in the South . A typical house in the North of England now costs £163,138, compared to £331,047 in the South.”

Home ownership rates have declined across all English regions over the past decade. While the decline has been fairly uniform across regions, the biggest reduction has been in London, where the home ownership rate has fallen from 57 per cent to 47 per cent. In Yorkshire, 63 per cent of people own their own home. The counterpart to this has been robust growth in the private rental sector; for example, 30 per cent of households in London now rent.