Pre-Brexit hit as house price growth slowest since 2013

Pre-Brexit hit as house price growth slowest since 2013

The latest figures released from Nationwide have revealed that across the United Kingdom, annual house price growth has slowed to its weakest pace since February 2013.

The building society said prices in London fell 0.8 per cent past year while the so-called "outer metropolitan" region around the capital suffered a 1.4 per cent decline.

The strong growth in Northern Ireland was followed by Wales and the east midlands, where prices lifted by 4 per cent annually to £156,891 and £184,283 respectively.

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".

House prices fell by 0.7 percent from November, the biggest monthly fall since July 2012, Friday's data showed. The average house price in the United Kingdom in December 2018 was £212,281 compared to £211,156 in December 2017.

But while houses across London and large swathes of the Home Counties are now worth up to 1.4 per cent less than 12 months ago, those in Yorkshire are worth an average of 3.7 per cent more.

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The slump left prices just 0.5 per cent higher than they were a year earlier - the slowest annual rate of growth since February 2013.

"This marks a noticeable slowdown from previous months".

Nationwide attributes to uncertain economic outlook as being a drag on home buyer sentiment. "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 United Kingdom house prices to rise at a low single-digit pace in 2019", Mr Gardner added.

"The economic outlook is unusually uncertain", he added, blaming the slowdown on Brexit uncertainty given wage growth and employment are both strong.

Indeed, even though house prices have been rising more quickly in the north of England since Q2 2017, price levels are still significantly higher in the south. "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". A home in the south of England averages £329,240, almost double the average of £166,642 for a place in the north. That figure was also down 0.7 per cent month-on-month.

EY ITEM Clubs's chief economic advisor Howard Archer warned house prices could tumble in an event of a no deal. "As long as borrowers can meet affordability criteria, whether they are taking out a new mortgage or switching to another deal, there will be plenty to attract them for a while yet".