The website Home, which monitors asking prices, says prices have rallied strongly in the last month but thanks to growing inflation at 3.5 per cent “UK home prices are really going nowhere overall.”
It says that despite significant year-on-year growth in several regions, 2017 looks set to be a year of stagflation for property.
Prices in the East of England and the East Midlands have risen most during the last 12 months (9.4 and 5.6 per cent respectively). However, unlike the East Midlands, supply is rising rapidly in the East of England and Home says this will temper price rises over the coming months.
It says the Midlands is performing well, with price growth over and above the level of inflation but the rate appears sustainable as supply is not increasing. Moreover, rental yields, which fundamentally underpin house prices, are better there than in what it calls “over-bought London and the South East” and this will encourage continued investment.
Overall, the website claims price rises are much more subdued this year than last. In April 2016 the annualised rate of increase of home prices was 7.5 per cent; today the same measure is just 3.0 per cent.
It says the average asking price in England and Wales is now £302,793 and its measure of ‘typical time on market’ has dropped to 76 days - the same as March 2016.
Meanwhile a similar warning of stagnation has come from the Royal Institution of Chartered Surveyors.
Its latest monthly survey shows that stock levels are at a new record low. The number of people interested in buying a property - and the number of sales - were also "stagnant" in March, it said.
But because of the shortage of housing, it said prices in many parts of the UK are continuing to accelerate.