What’s the latest?
House prices fell for the first time in nearly two years in March as the property market showed further signs of slowing down.
The typical UK home lost 0.3% of its value during the month to stand at £207,308.
The slide was the first time prices have dropped since June 2015, according to Nationwide Building Society.
The annual rate at which property values are climbing also slowed to 3.5% in March, down from 4.5% in February.
But the gap between the weakest and the strongest performing regions reached its narrowest level since 1978.
Why is this happening?
House price growth has been on a downward trend since the middle of last year.
On the one hand, stretched affordability and tighter mortgage lending criteria are limiting activity and growth.
Hansen Lu, property economist at Capital Economics, said: “With the economic and interest rate backdrop supportive, the immediate risks of a house price correction seem low.
“We see price growth cooling to 2% year-on-year by the end of 2017.”
Who does it affect?
The fall in house prices does offer something of a reprieve for first-time buyers who are struggling to get on to the housing ladder.
But it won’t be welcome news for homeowners, landlords and sellers seeking to capitalise on their housing equity.
Sounds interesting. What’s the background?
The headline figure masked a mixed picture for price growth across different parts of the UK. Six regions saw the pace of house price growth accelerate, while six regions saw it ease.
The gap between growth in the weakest and strongest regions now stands at 6.8%, the second smallest on record.
But while regional growth rates have begun to converge, there are still significant disparities in price levels.
The Nationwide survey is in line with other data pointing to a slowdown in the property market.
Figures from the Council of Mortgage Lenders and the British Bankers’ Association showed a fall in both the total amount being lent and the number of mortgages approved for house purchase in February.
And the Royal Institution for Chartered Surveyors said demand from potential buyers was static during the same month, while the number of homes for sale was close to record lows.
It remains to be seen if the property market undergoes its traditional spring revival or if the uncertainty caused by Brexit causes buyers to sit tight.
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