House prices grind to a halt

House prices grind to a halt

Annual house price growth slowed to a near halt in January, increasing just 0.1 per cent on the same time last year, latest data from Nationwide has shown. 

The slowdown followed an already subdued market in December, when house prices rose 0.5 per cent, according to the Nationwide House Price Index. 

The average home in January cost £211,966. By comparison, in December 2018, the average price tag was £212,281. 

Robert Gardner, Nationwide's chief economist, said: "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, 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."

He added: "The economic outlook remains 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."

Jonathan Samuels, CEO of the property lender, Octane Capital, said the robust jobs data and better wage growth had been overshadowed by the countdown to Brexit.

He said: "Faced with unprecedented political and economic uncertainty, the property market is in a state of near paralysis.

"Against such an ominous political backdrop, it’s no surprise new buyer enquiries are in free fall and that sellers are also pulling down the shutters.

"Low single digit price growth in 2019 would be a victory of sorts, especially in the capital, which is paying for its over-exuberant growth several years ago. In Brexit, the UK property market is entering genuinely uncharted waters."