House price growth slowed to its weakest pace in more than five years at the end of 2018, according to Nationwide's house price index.
Year-on-year house price growth was just 0.5 per cent in December, down from 1.9 per cent the month before and the weakest pace of growth since February 2013.
On a month-on-month basis, house prices fell by 0.7 per cent during last month, bringing the price of the average house down to £212,281.
Robert Gardner, Nationwide's chief economist, said the latest figures marked a "noticeable slowdown" from previous months.
He said: "However, it is broadly in line with our expectations. Indicators of housing market activity, such as the number of property transactions and the number of mortgages approved for house purchases, have remained broadly stable in recent months, but forward-looking indicators had suggested some softening was likely.
"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."
He said the near-term prospects of the UK housing market depended on how quickly this uncertainty lifted, but he warned the economic outlook was "unusually uncertain".
Nationwide is predicting house prices will rise by a low single digit pace during 2019.
The building society found year-on-year house price growth was being dragged down by falls in southern England, particularly London and its surrounding areas.
London saw house prices fall by 0.8 per cent over the past 12 months while the outer metropolitan area saw prices fall by 1.4 per cent.
Lucy Pendleton, founder director of independent estate agents James Pendleton, said: "Britain is almost back to square one as Brexit delivers a lost year.
"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."
Ms Pendleton said that without buyer incentives such as Help to Buy and stamp duty reliefs for first-time buyers, the UK property market would probably have taken a "big backward step".
damian.fantato@ft.com
