Nationwide – House price growth weakest since February 2013
The latest house price index from Nationwide shows that annually, house prices increased by 0.5 per cent in December, the lowest growth rate recorded since February 2013. This time last year, the figure stood at 2.6 per cent.
On a monthly basis and seasonally adjusted, prices fell by 0.7 per cent, in sharp contrast to the 0.4 per cent figure recorded for November. The average house price in the UK is now £212,281.
Nationwide chief economist Robert Gardner says: “It is likely that the recent slowdown is attributable to the impact of the uncertain economic outlook on buyer sentiment, given that it has occurred against a backdrop of solid employment growth, stronger wage growth and continued low borrowing costs… Near term prospects will be heavily dependent on how quickly this uncertainty lifts.
“The economic outlook is 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.”
The report also shows that regional variations continue to make themselves obvious: during 2018, property prices in Northern Ireland went up by 5.8 per cent, and in Wales, 4 per cent. Trailing these were Scotland, at 0.9 per cent, and England, where house prices grew by just 0.7 per cent.
Gardner goes into further detail on the picture in England: “One of the more prominent regional trends in 2018 was the further narrowing of the north-south house price divide in England. Price growth in the south… moderated throughout the year, while in the northern regions… price growth remained broadly stable in the 3 per cent to 4 per cent range.”
Commenting on the overall figures, James Pendleton founder and director Lucy Pendleton says: “The Nationwide’s annual prediction wasn’t anything to write home about but the UK has still undershot that by half. House prices soldiered on throughout 2018 and then threw their arms up and crawled over the line with just yards to go.
“Brits’ attitude to the market this year has been mixed with plenty of twists and turns but ultimately the big picture has come home to roost. You can thank politicians for that. Forward guidance from the Bank of England has been at a historical high but Brexit is the spook that just won’t allow confidence to rise to more than a slow walk.”
Mortgage Advice Bureau head of lending Brian Murphy comments: “The softer year on year average growth figure of 0.5 per cent is within market expectations for 2018, however one might suggest that this masks the better performance of some regions… and consumer confidence has remained resilient for much of the year. This more nuanced picture obviously isn’t reflected in the headline figures, but as the current political and economic uncertainty continues, could well continue to be the case until such times as more clarity is available.”
Octane Capital chief executive Jonathan Samuels adds to the downbeat mood: “A low single digit pace in growth is probably the best we can hope for in 2019. In fact, growth of any kind will be a victory,” he says.
Source: Mortgage Strategy