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UK house price growth at the lowest for 5 years

The rate of annual house price growth in the UK fell to just 1.8% last month, the slowest rate of increase since March 2013.

According to mortgage provider Halifax, the annual rate of growth slowed from 2.2% in January to 1.8% in February.

As reported by the BBC, the average price of a home has fallen from £226,408 in November, to £224,353 last month; a fall of £2,055.

However, prices actually rose by 0.4% in February, after declining in the previous two months.

Russell Galley, managing director of the Halifax, said: “The labour market continues to perform strongly, with the number of people in employment rising by 88,000 in the three months to December.

“While we expect price growth to remain low, the low mortgage rate environment, combined with an ongoing shortage of properties for sale, should continue to support house prices over the coming months.”

Nationwide also signalled a slowdown in annual house price inflation, although it estimated a figure of 2.2%.

Price growth is expected to remain low in the months ahead, although Halifax believes low mortgage rates and flourishing job prospects will continue to support prices.

While some experts believe that price rises moderating is good news, as it makes it easier for first-time buyers to enter the market, others are concerned that the slowdown shows it will be another difficult year for the housing market.

Howard Archer, chief economic adviser to the EY Item club, said: “Activity is expected to remain lacklustre as the extended squeeze on consumer purchasing power only gradually eases, confidence is fragile and appreciable caution persists over engaging in major transactions.

“Potential house buyers also look highly likely to face further interest rate hikes in 2018.”

The news comes days after Prime Minister Theresa May said in a speech that home ownership was currently out of reach of those without family money and that young people without family wealth are “right to be angry” at not being able to buy a home.

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