UK house price rises 'almost grind to a halt'

Weak global growth and Brexit uncertainties have resulted in annual house price growth in the UK remaining below 1% in September for the tenth month in a row, according to a new index.

House for sale in the UK
Year-on-year prices increased by only 0.2% last month, according to Nationwide Building Society's house price index, taking the average across the UK to £215,352.The index showed that, over the third quarter, there were rises of 2% or more in Northern Ireland, Wales, NW and NE England, and the West Midlands (though all from a price base below the national average), but there were substantial falls in and around London, with the capital itself recording a 1.7% fall to a £460,686 average.

Nationwide: UK annual house price growth below 1%

Robert Gardner, Nationwide's chief economist, said: "UK annual house price growth almost ground to a halt in September. This marks the tenth month in a row in which annual price growth has been below 1%."Indicators of UK economic activity have been fairly volatile in recent quarters, but the underlying pace of growth appears to have slowed as a result of weaker global growth and an intensification of Brexit uncertainty."However, the slowdown has centred on business investment - household spending has been more resilient, supported by steady gains in employment and real earnings."

Brexit: the housing market could go either way

Jonathan Hopper, managing director of Garrington Property Finders, said the index indicated "the batteries have finally run flat" in the housing market after months of slowing prices.However, he added, “Insipid though the stagnation is, it is also an achievement. Despite an increasingly gloomy economic backdrop and political paralysis, the property market has performed the softest of soft landings.“While the number of homes changing hands has reduced, buyer demand has kept surprisingly stable – buoyed by strong wage growth and low interest rates.“The stagnation in prices has repressed demand, meaning that an end to the Brexit deadlock could unleash a recovery rally in both prices and buyer enquiries.“But with one month to go until Halloween (the current Brexit date), the market is poised to go either way. While value-seekers are capitalising on the current uncertainty to press home their advantage and secure big discounts, more cautious buyers are doubling down and waiting until the storm has passed.”

"Natural correction" in UK property market

David Westgate, group chief executive at Andrews Property Group, said it was no surprise price growth stalled in September as the month had been "arguably the most turbulent month in politics for a generation".He added, “Brexit is being blamed for the current slowdown in the market and while it’s without doubt a factor, we are also at the end of a natural cycle in the market.“Between 2011 and 2016, house prices were on a five-year bull run and what we’re seeing is as much a natural correction as the result of political chaos."

EY: "We suspect that house prices will remain soft"

Howard Archer, chief economic adviser at the EY Item Club, said, "With the economy largely struggling and the outlook highly uncertain, we suspect that house prices will remain soft in the near term at least."Consequently, we expect house prices to only rise around 1% over 2019 on most measures."

For more news and views, visit our dedicated UK section.

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