According to Nationwide, the leading mortgage lender, home prices rose only 2.6 per cent in 2017, while London fell for the first time in eight years.
That grew by 4.5% in 2016, the slowest annual growth rate since 2012, as households with falling real wages are increasingly reluctant to make significant spending decisions.
Nationwide, the country said economic growth was slowing and household fiscal pressure continued to rise, with prices likely to slow further to around 1-1.5 per cent in 2018.
The average home price in December was 211,156, up 0.6 percent for the month.
Last year, prices in London fell 0.5 percent, making it the worst performing area since 2004, as more buyers couldn’t buy a home in the capital.
The country’s chief economist, Robert Gardner (Robert Gardner) said: “in London and the south-east, affordability becomes more challenging, more and more people are forced to withdraw from the market, or you need to borrow more income.
It will take nearly 10 years to buy a home in London, and the average property price at the end of last year was 470,922, Gardner said.
In 2017, prices in every area of the UK, excluding London, rose. The largest increase was in the west midlands plain, where the average price rose by 5.2% to 182,861 pounds. Second in the southwest, prices rose 4.8 percent to 239,576 pounds.
The country said low mortgage rates, high employment levels and a shortage of property in the market prevented a slowdown in UK housing growth in 2017.
Lenders said the outlook for the property market in the coming year was uncertain and highly dependent on the outcome of brexit negotiations and the UK’s overall economic performance.
“The performance of the real estate market in 2018 will largely depend on the overall economic development. The development of Brexit will remain important, although these are still difficult to predict, “Gardner said.
“The UK housing market has seen significant regional differences in housing prices in recent years, and it is not clear how brexit will affect these changes.”
EY project club forecasting group’s chief economic adviser, said Howard Archer (Howard Archer) of real estate market in 2018 will be “very challenging” one year, in part because, after the bank of England increase interest buyers worry about possible higher mortgage costs this is for the first time in 10 years in November, and said it could rise further.
“The housing market activity is still being squeezed by consumer purchasing power, fragile confidence and cautious pressure to engage in big deals,” said archer. “Potential buyers may also be concerned about the possibility of further rate hikes after November 2011. We expect a modest 2% rise in house prices in 2018. ”
Household finances have been under new pressure since the brexit vote, leading to a sharp fall in the value of the pound, which has pushed up the price of imports from abroad.
That, in turn, has pushed up inflation, now at 3.1%, well ahead of the bank of England’s 2% target, above the current 2.3% pay rise, which suggests a fall in real wages.
According to the Mortgage Advice Bureau, the property market will likely be similar to the market in 2017, with first-time buyers – particularly London – home buyers struggling to rent. Regional differentiation is expected to continue this year, and prices in some areas will rise faster than others in the next 12 months.
Nationally, changes in affordability have increased over the past decade. Wales, Scotland and northern England region economic applicability have improved, but after house prices dropped sharply in Northern Ireland, the economic crisis has been the biggest improvement, before the financial crisis, the proportion is still about 40% lower than in 2007.
However, prices in London are 55 per cent above their 2007 highs, while prices in the north, Yorkshire and humberside are still lower than in 2007.
Alex Gosling, founder of HouseSimple.com, an online property broker, said a 2.6 per cent rise in UK house prices in 2017 showed that the housing market was “basically in a very healthy state”.
He added: “the housing market has proved surprisingly resilient in 2017, given that the Brexit vote and article 50 have been cited.
“The main surprise is undoubtedly the slowdown in house prices in London. It has been 13 years since the nation’s capital was at its lowest point, and since then we have seen prices soar to unprecedented levels. “