UK House Prices Barely Grow Ahead Of Brexit

House price growth “ground to a halt” in January, with prices just 0.1pc higher than the same time last year, according to Nationwide's latest house price index. This marks a further drop from December when growth was at 0.5pc after months of prices rising by around 2pc. The average UK house price now stands at £211,966, around £3,000 cheaper than in October. Robert Gardner, Nationwide's chief economist, said the subdued activity in the housing market was due to the uncertain economic outlook weighing on buyer confidence.

“The economic outlook remains unusually uncertain. However, if the economy continues to grow at a modest pace, with the unemployment rate and borrowing costs remaining close to current levels, we would expect UK house prices to rise at a low single-digit pace in 2019,” he said. Mr Gardner previously stated that if the uncertain economic outlook lifts, “things should start to pick up to normal levels of about 2pc” this year. Estate agent Jeremy Leaf said the figures confirmed a market “struggling to weather the Brexit storm but not collapsing”. “Looking ahead, there are probably too many potential bumps on the road to give a clear steer as to the future direction of prices and activity, but what is apparent is that there remains a determination among a good number of serious buyers and sellers to find a way of moving on.” Jonathan Samuels, chief executive of property lender Octane Capital, said the property market was in a “state of near paralysis”. “A robust jobs market, better wage growth and low borrowing rates are providing a degree of support but are ultimately being overshadowed by the countdown to Brexit. “Against such an ominous political backdrop, it’s no surprise new buyer enquiries are in free fall and that sellers are also pulling down the shutters.” The Royal Institution of Chartered Surveyors (Rics) predicts that national house price growth will come to a “standstill” this year, but a supply shortage “will negate outright falls”.

Halifax's Russell Galley is more bullish. “On the basis that it is still most likely that the UK exits the EU with a form of withdrawal agreement and transition period”, he expects annual house price growth nationally to be between 2pc and 4pc by the end of the year.

Author: Sophie Christie