Annual house price growth remained subdued in March, according to the Nationwide building society.
House prices rose 2.1 percent in the year to March, weaker than all forecasts in a Reuters poll of economists that had pointed to growth of 2.6 percent and slowing from a 2.2 percent increase in February. Amongst the home nations, only Scotland saw weaker price growth than England, with prices up just 0.2% compared to the same period of past year.
"Consumer confidence has remained subdued, due to the ongoing squeeze on household finances as wage growth continues to lag behind increases in the cost of living", said Robert Gardner, Nationwide's Chief Economist. Subdued economic activity and the ongoing squeeze on household budgets is likely to continue to exert a modest drag on housing market activity and house price growth this year.
Looking ahead, Nationwide expects house prices to hold steady this year, primarily due to a lack of homes coming up for sale and low unemployment levels.More news: Laureas Sports Awards: Roger Federer creates history, Laureas website crashes
For the fourth quarter in a row, regions in the North of England recorded stronger annual house price growth than those in the South. Prices were forecast to rise 0.2%.
The West Midlands saw the strongest English growth in the first quarter, with prices up 4.9 per cent annually.
"By contrast, the Northern English regions have recorded a gradual acceleration and recorded their strongest growth rate since 2014 in the first three months of this year".
However, these trends have so far made only small inroads in narrowing the North-South divide.More news: Snap Layoffs 2018: 100 More Employees to Get the Axe
Samuel Tombs, chief United Kingdom economist at Pantheon Macroeconomics, said Nationwide's figures provide "more evidence that even the relatively modest increase in mortgage rates seen over the last six months has hit the market hard".
"As a result, the scope for further increases in house prices driven by rising leverage is extremely limited".
Brian Murphy, Head of Lending for Mortgage Advice Bureau also reflects on the varying national picture and said: "Given that some areas of the country, such as Northern Ireland and Wales, are seeing more significant increases in prices, yet London is still seeing prices cool, one might suggest that the modest overall average masks a broad degree of variance across the regions, which rather underscores the effect that dipping London and South East values are having on the wider average".
Archer said the year ahead looks set to be a hard one for the housing market and expects price gains over the year to be limited to "a modest two per cent". This was the second consecutive fall in prices.More news: WV Teachers Still at Capitol Day After Governor Announces Deal
Mark Harris, chief executive of mortgage broker SPF Private Clients, said: "Thankfully, mortgage rates are still relatively cheaply priced as lenders compete for business but if a rate rise is on the cards, they are unlikely to stay this low forever".