House price growth remains subdued amid uncertainty

House price growth remains subdued amid uncertainty

Annual house price growth was at 0.6 per cent in August - the ninth month in a row it was below 1 per cent, according to the Nationwide House Price Index.

The average house price in the UK at the end of August is £216,096, down £1,567 when compared with a month earlier.

But the average house price increased by £1,351 since the same month in 2018 and is up £5,601 when compared with August 2017.

According to Nationwide, in spite of a healthy labour market conditions and low borrowing costs, uncertainty has dragged on sentiment and activity.

Robert Gardner, Nationwide's chief economist, said: “Surveyors report that new buyer enquiries have increased a little, though key consumer confidence indicators remain subdued.

“Data on the number of property transactions points to a slowdown in activity, though the number of mortgages approved for house purchase has remained broadly stable.”

Annual house price growth has slumped since 2016, falling from nearly 6 per cent in August of that year.

Jonathan Samuels, chief executive of property lender, Octane Capital, said: “Based on this week’s high political drama, it’s looking like August could be the quiet before the storm.

“Politically at least, the last days of our membership of the EU are starting to feel like the last days of Rome and the property market is unlikely to emerge from them unscathed.

“Yes, low mortgage rates, a strong jobs market and low supply are supporting prices, but sentiment could come under a lot of pressure in the next 60 days."

This month Nationwide also looked at how property prices in some of the UK’s major cities were affected by the proximity of a tube, metro or train station.

Unsurprisingly, London homebuyers were willing to pay a greater premium for being close to a station, compared with those in Greater Manchester and Glasgow.

Mr Gardner said: “Buyers in the capital pay an extra 9.4 per cent to be within 500m of a station (equivalent to £42,900 on the price of an average home in London) and 4.1 per cent (c£18,800 extra) to be within a kilometre of a station.

“This probably reflects the greater reliance on public transport in the capital, with residents less likely to drive.”

According to the Nationwide research, those purchasing properties in Manchester would be willing to pay 7.8 per cent more, or an extra £12,600, to be within a kilometre of a station. Meanwhile, residents in Glasgow would only fork out an additional 1.7 per cent, or £2,500, for the same distance.