Commenting on the latest ONS house price data, Barret Kupelian, Chief Economist at PwC UK, says:
“The housing market is no longer moving as one country, but as two. Today’s data shows the UK housing market is still living with a pronounced North-South divide (see chart). London and the South East remain under pressure, with London house prices down 3.4% year-on-year, while the North continues to move ahead, though at little more than the pace of consumer price inflation.
“The question now is not whether the market softens, but by how much. The Autumn Budget uncertainty of last year may be behind us, but events in the Middle East have replaced it with a fresh fog: uncertainty over interest rates, volatility in swap markets pushing up mortgage pricing, and the risk of higher than initially anticipated inflation for longer. Add in the introduction of the Renters’ Rights Bill, and a cooler housing market would be a natural consequence.
“In short, the housing market is in a cautious phase. Once the fog begins to lift on rates, inflation and regulation, activity should start to recover.”
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