Nationwide housing data confirms cool-down in UK property market

Data from the UK housing market indicates home prices fell in February for the first time in five months, confirming a cool-down in the housing market.

According to data from mortgage lender Nationwide, house prices fell by 0.1% in February compared to economist expectations for a 0.3% rise.

At the same time, the annual rate of price inflation fell for the six consecutive month to stand at 5.7%, its lowest level for 16 months.The data confirms the slowing trend in the UK housing market since the middle of 2014, when regulators tightened mortgage lending rules.

Nationwide’s figures, which are based on home loans it has approved during the month, are the first to show prices for February.

Despite the cool-down in recent months, Nationwide said economic conditions were supportive of housing market activity and cheap mortgage rates was likely to cause house prices to rise faster than in recent months.

“Mortgage rates remain close to all-time lows and consumer confidence remains buoyant thanks to a further steady improvement in labour market conditions,” said Nationwide’s chief economist, Robert Gardner. “The unemployment rate has continued to decline and earnings growth has picked up, particularly in inflation-adjusted terms, thanks in part to the sharp decline in energy prices,” he added.

Following the release of the Nationwide data, the UK pound was little changed against the euro but fell against other major currencies such as the US dollar, at 1.5397 and Japanese yen, at 1.4698. However, the UK’s FTSE 100 index of London leading shares continued to trade at all-time highs, up 21 points or 0.31% at 6968.