LONDON — The UK housing market is slowing down but lead indicators mask huge regional difference, according to estate agents Savills.
Nationwide’s housing index recorded year-on-year growth of just 1.1% to August, while Halifax recorded 2.6% growth in the same period.
That points to a dramatic slowdown. At the same point last year, Nationwide measured 5.6% growth, and Halifax measured 6.9%.
Savills says the government’s lack of clarity on Brexit, wider economic uncertainty, mortgage lending limits, and wider economic uncertainty are all acting as a drag on the housing market.
But as the chart demonstrates, however, UK-wide figures don’t illustrate the regional difference in house price growth, with London posting flat growth while areas around it see price rises of over 12%:
So what’s behind different rates of growth?
Chris Buckle, Savills residential research director, said that regional differences are more closely-linked to market cycles than Brexit uncertainty, with expensive areas of London looking fully-priced and up-and-coming commuter areas benefitting from booming demand and lower prices.
“Economic uncertainty is holding back both price growth and activity levels, particularly in London and the South East,” Buckle said. “But regional differences in price growth have more to do with the stage we are at in the market cycle than the Brexit effect, and the fact that buyers in London and the South East are hitting up against borrowing limits.”
The strongest house price growth in the year to June was in Salford, north-east England (13.3%), Tendring, south-east England (13.0%), and Corby, in the Midlands (10.9%).