House price growth ground to a halt in January, with property values showing close to zero growth for the year as Brexit uncertainty hit confidence

Prices edged up by just 0.1 per cent year on year in January, the smallest annual increase for the index for almost six years, and a sharp decline from 1.9 per cent growth in November, Nationwide said. As recently as January 2017, annual house price growth was running at 4.3 per cent.

Across the UK, the average house price now stands at £211,966, just £210 more than a year ago.

We’ll tell you what’s true. You can form your own view.

From 15p €0.18 $0.18 USD 0.27 a day, more exclusives, analysis and extras.

A no-deal Brexit would see house prices slump a further 5 per cent in 2019, according to predictions from Howard Archer, chief economic adviser to the EY ITEM Club.

Conversely, if a deal is agreed by March, prices could rise by 2 per cent, Mr Archer said.

Bank of England governor Mark Carney told MPs in September that a disorderly Brexit could cause house prices to plummet as much as 35 per cent amid spiralling interest rates and falling demand.

Robert Gardner, Nationwide’s chief economist, said the housing market has improved slightly for buyers.

He said: “Annual house price growth almost ground to a complete halt in January, with prices just 0.1 per cent higher than the same time last year. This follows a subdued December, when price growth slowed to 0.5 per cent.

“Indicators of housing market activity, such as the number of property transactions and the number of mortgages approved for house purchase, have remained broadly stable in recent months, but forward-looking indicators had suggested some softening was likely.

“In particular, measures of consumer confidence weakened in December and surveyors reported a further fall in new buyer inquiries towards the end of 2018.

“While the number of properties coming on to the market also slowed, this doesn’t appear to have been enough to prevent a modest shift in the balance of demand and supply in favour of buyers in recent months.”

Mr Gardner said the uncertain economy is likely to be acting as a drag on the housing market, despite strong employment figures, wage growth and low interest rates.

He continued: “Near-term prospects will be heavily dependent on how quickly this uncertainty lifts, but ultimately the outlook for the housing market and house prices will be determined by the performance of the wider economy – especially the labour market.

“The economic outlook remains unusually uncertain.”

Support free-thinking journalism and subscribe to Independent Minds

Howard Archer, of the EY Item Club said: “If Brexit is delayed, ongoing uncertainty is likely to weigh down on the housing market and could well see house prices stagnate or fall slightly.”

Samuel Tombs,  chief UK economist at Pantheon Macroeconomics, said: “The uncertainty created by Brexit largely is responsible for the further decline in year-over-year growth in house prices to near-zero, from a broadly stable rate of about 2 per cent in the 18 months before November.”

Comments

Share your thoughts and debate the big issues

Learn more
Please be respectful when making a comment and adhere to our Community Guidelines.
  • You may not agree with our views, or other users’, but please respond to them respectfully
  • Swearing, personal abuse, racism, sexism, homophobia and other discriminatory or inciteful language is not acceptable
  • Do not impersonate other users or reveal private information about third parties
  • We reserve the right to delete inappropriate posts and ban offending users without notification

You can find our Community Guidelines in full here.

Create a commenting name to join the debate

Please try again, the name must be unique Only letters and numbers accepted
Loading comments...
Loading comments...
Please be respectful when making a comment and adhere to our Community Guidelines.
  • You may not agree with our views, or other users’, but please respond to them respectfully
  • Swearing, personal abuse, racism, sexism, homophobia and other discriminatory or inciteful language is not acceptable
  • Do not impersonate other users or reveal private information about third parties
  • We reserve the right to delete inappropriate posts and ban offending users without notification

You can find our Community Guidelines in full here.

Loading comments...
Loading comments...