House prices are expected to remain flat throughout 2020 after the past year saw prices edge up just 1.4 per cent.
The Nationwide House Price Index, published today (January 3), showed annual UK house price growth had peaked slightly as 2019 drew to a close, with prices 1.4 per cent higher in December 2019 year-on-year.
Such subdued growth is likely to continue, according to Nationwide’s chief economist Robert Gardner, who said he expected the economy to expand at a “modest pace” in 2020 which would cause house prices to remain “broadly flat” over the next 12 months.
He added: “Looking ahead, economic developments will remain the key driver of the housing market trends and house prices.
“Much will continue to depend on how quickly uncertainty about the UK’s future trading relationships lifts as well as the outlook for global growth.”
For December, the average house price sat at £215,282 - 1.4 per cent up on last year but slightly less than the £215,734 measured for November.
The figures also showed first-time buyer numbers continued their steady recovery, reaching 354,400 in the year to October. This is more than double the 155,000 recorded in 2009 and only 12 per cent below the 2006 peak.
Mr Gardner said this was partly down to robust labour market conditions as well as low borrowing costs, adding that though house prices remained high relative to average incomes, the cost of servicing the typical mortgage had remained “close to long run averages”.
In house price terms Scotland was the strongest performing nation in 2019, with prices up 2.8 per cent over the year.
By comparison Wales saw a further slowing in its annual rate of house price growth to 1.5 per cent, down from 2.9 per cent in Q3.
Prices were up 1 per cent over the year in Northern Ireland, while England remained the weakest performing nation with prices up just 0.2 per cent compared to a year ago.
London ended the year as the weakest performing region, with an annual price decline of 1.8 per cent. This marked the 10th quarter in a row that prices had fallen in the capital.
Marc von Grundherr, director of Benham and Reeves, said: “While we didn’t quite finish the year with a bang, the first annual increase above 1 per cent in as long as a year is certainly something to toast to.
“It’s been a rough ride of late and while we’re unlikely to see any immediate New Year’s resolutions where the rate of house price growth is concerned, there are still plenty of positives to take into a new decade.”
Tomer Aboody, director of property lender MT Finance, said he was looking forward to a “stronger 2020” where buyer confidence should be higher and marginal house price growth would be seen.