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Annual house price growth is lowest for four years, says Halifax

Growth in house prices is at the lowest rate since May 2013 and more than halving over the year with no growth in the last month.

Date from the Halifax shows the rate of house price growth is at 3.8% over the year to March 2017 down from 5.1% in February and the lowest rate since May 2013.

The average property price in the UK is £219,755 which has remained flat in the last month and increased by only 0.1% over the last quarter suggesting the slowdown will continue during the year.

For first time buyers the slowdown in growth will be welcome giving them a chance to save more for a deposit or receive higher earnings to purchase their first home.

With competition from buy-to-let investors prospective home buyers must continue renting and saving for a bigger deposit.

Long period of house price growth

Martin Ellis, Halifax housing economist said the lengthy period of rapid house price growth has made it increasingly difficult for many to purchase a home as income growth has failed to keep up.

One advantage of rising house prices for homeowners is remortgage buyers can now release capital for home improvements.

In addition older homeowners have accumulated considerable value in their properties and the equity release mortgage buyer can access this wealth to maintain their lifestyle, holidays or home improvement.

The annual rate of house price growth has more than halved over the past 12 months and the higher house prices appears to have curbed demand.

Nonetheless, the supply of both new homes and existing properties available for sale remains low.

This, together with historically very low mortgage rates, is likely to support house price levels over the coming months, says Mr Ellis.

House price gains exceed earnings

According to the Halifax, the average house prices has increased by more than total average employee's’ net earnings in a third of UK local authority districts in the last two years.

For the UK the biggest gap between rising property prices and earnings was in Haringey in London.

Houses prices in the popular borough increased by an average of £139,803 over the last two years and was £91,450 higher than average take-home earnings of £48,353 over the same period.

In terms of wealth, this added £5,815 per month to the value of the average property compared to the earnings of £2,014 per month.

Home movers will benefit from this increase although the gap between their current home and the next more expensive property increases which means they would need a larger mortgage or deposit.

What are your next steps?

Speak to our LCM mortgage advisers if you are planning to move home, buying your first home, remortgaging your existing home to a new cost effective mortgage deal or are a buy-to-let investor.

Learn more by using the mortgage cost calculators, equity release calculator and property value tracker chart. Start with a free mortgage quote or call us and we can take your details.

For equity release buyers our London City Mortgage brokers can recommend lifetime mortgages allowing you to receive cash from your property to help maintain your standard of living as costs rise.

Use your dashboard to access online mortgage quotes, money off vouchers and start your mortgage application online 24/7 on desktop, tablet or smartphone.

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