House prices settle into 'new normal' with 0.2% monthly growth: Nationwide

Robert Gardner, Nationwide's Chief Economist, said: “February saw a softening in house purchase approvals to 64,000 cases, following a surprise rise in January. These figures are broadly in line with our expectations and close to the average for the last three months of 2017. Surveyors continue to report subdued levels of new buyer enquiries and recent months have also seen a softening in new instructions.

“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. We continue to expect house prices to rise by around 1% over the course of 2018.

Nicholas Finn, executive director of Garrington Property Finders, commented: “This is what the new normal looks like. After making a brittle start to the year, the property market is settling back into a period of cautious normality.

“Last year’s snap election cheated the market of its traditional post-Easter boost, but this Spring we’ve seen an injection of new stock and an uptick in buyer interest. Of course the number of homes for sale remains at a desperately low level, but crucially the market has become free-flowing again."

Jonathan Samuels, CEO of Octane Capital, said: "The 0.2% rise in April negates March's drop and neatly symbolises a market that lacks momentum. While the annual rate of growth has nudged up slightly, it's unlikely to break out of the very low single digit bracket in 2018.

"At the same time, low stock levels and continued cheap borrowing rates mean that while the market is cooling in parts of the country, above all the capital, prices will not collapse.

"While inflation has fallen and a rate rise next month is no longer the dead cert many had it down as, households still feel squeezed and transaction levels remain low."

Mike Scott, chief property analyst at Yopa, added: "This month’s Nationwide figures are broadly positive for the housing market. House prices continue to grow slowly and sustainably, with rises for the month of 0.2% and for the past twelve months of 2.6%. Nationwide are forecasting a rise of 1% for 2018 as a whole, which if anything is looking a little pessimistic.

"However, there are a few clouds on the horizon. They report falls in the numbers of both buyer enquiries and houses coming up for sale, suggesting a slowdown in market activity, although this may not have much effect on prices if the drops in demand and supply run in tandem."