House price growth most evenly spread for 40 years

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The pace of house price growth across the country is running at its most evenly-spread levels in nearly 40 years, according to an index.    

Across the UK as a whole, the average property value in March stood at £207,308 - a new record high - figures from Nationwide Building Society show.

Looking across the regions, the gap between the strongest and the weakest house price growth has narrowed to just 6.8 percentage points.

Nationwide said this is the smallest gap seen since 1978. The strongest-performing region is the Outer South East, where house prices are up by 6.4% annually. The weakest-performing region is North East England, where property values are down by 0.4% year on year.

The Outer South East region includes Bedford, Brighton and Hove, Milton Keynes, Aylesbury, Oxfordshire, East Kent, Southampton and Portsmouth. 

Robert Gardner, Nationwide's chief economist, said around half of regions across the UK have seen house price growth accelerate and the same proportion have seen house price growth slow down - narrowing the gap between the strongest and the weakest-performing regions.

He said: "Interestingly, the spread in the annual rate of change between the weakest and strongest-performing regions was at its narrowest since 1978 at 6.8 percentage points - the second smallest gap on record.

"The South of England continued to see slightly stronger price growth than the North of England, but there was a further narrowing in the differential."

Nationwide said some regions in southern England have seen a "marked slowing" in annual price growth in recent months.

Overall, house prices across the South of England have increased by 5% year on year, while those in the North of England and the Midlands have increased by 3.8% annually.

Some experts have recently pointed to evidence that house price growth has slowed down in places where affordability is already particularly stretched, while there may be more scope for house prices to push up in parts of the country offering better value.

But while the percentage growth in house prices has become more uniform across the country, the change in house prices is still very mixed when compared with their 2007 peak, Nationwide said.

For example, at £478,782 on average, house prices in London are nearly 60% above their 2007 levels. But property values in the North East of England, Yorkshire and Humberside and the North West of England are still lower than they were in 2007.

Across the UK generally, house prices increased by 3.5% annually in March, slowing down from a 4.5% annual increase in February.

Northern Ireland saw a pick-up in house price growth, with a 3.8% annual increase taking the average property value there to £127,921.

Price growth in Scotland has remained "fairly steady", Nationwide said. Values there increased by 2.9% annually to reach £143,964 on average.

Wales saw a slight softening in house price growth, with a 1.2% increase pushing average house prices there to £143,236.

Jeremy Leaf, a north London estate agent and a former residential chairman of the Royal Institution of Chartered Surveyors (Rics), said: "Demand has been softening ahead of the Article 50 trigger and creating uncertainty in the market. While demand to buy is still strong, accessibility and affordability are proving illusive for many."

Howard Archer, an economist at IHS Markit, said: "We believe the fundamentals for house-buyers will progressively deteriorate over the coming months with consumers' purchasing power weakening markedly and the labour market likely eventually softening."

Mr Archer added: "We expect house price gains over 2017 will be limited to around 2.5%."