Two rate hikes forecast for 2018
Monthly house price falls in the UK were -0.3% in February according to the Nationwide index, reversing the January spike in growth and bringing the first two months of the year in line with the low level growth seen throughout 2017. Annual growth was reported as 2.2%, down from 3.1% in January.
But there remain big differences between regions and price bands. In January 61% of RICS surveyors said that properties marketed over £1m were selling below asking prices. However, the market for properties under £500k appears more resilient to current pressures with 58% of surveyors saying sales prices were matching or exceeding asking prices; 42% reported minor discounts.
Consumer sentiment remained gloomy in February according to the GfK survey, with a majority of consumers expecting the economic situation to worsen over the coming twelve months. With this in mind it seems unlikely that falling CPI will bring about a bounce in consumer spending, and appetite for consumer credit is likely to continue falling as the cost of borrowing increases.