United Kingdom house prices rise at slowest pace in almost 6 years: Nationwide

Daniel Fowler
January 7, 2019

House prices were down by 0.7 per cent month-on-month in December.

The value of a typical home dropped by £1,763 in December alone - the equivalent of £56.87 a day, according to figures from mortgage lender Nationwide. The FTSE 100, which closed 0.6 per cent, or 41.57 points, lower at 6,692.66, was forecast to open 38 points higher when trading began.

Compared with a year earlier, prices rose by only 0.5% in December - the slowest annual rate of growth since February 2013 - and followed a 1.9% increase in November.

The figures will fuel fears that the housing market is running out of steam and could face a correction or even a crash in the coming months.

The weakest performer regionally for annual house price growth was the Outer Metropolitan area, which includes Reading, Slough, Windsor and Maidenhead and Wokingham. The rest of the South East stagnated.

A year-on-year rise of 1.9% in Nationwide's November report was an improvement on the previous month, but Brexit continues to sow uncertainty in the market.

Near term prospects will be heavily dependent on how quickly this uncertainty lifts.

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One of the more prominent regional trends in 2018 was the further narrowing of the north-south house price divide in England.

Mr O'Doherty said he did not expect Brexit to impact on the housing market's performance in Northern Ireland during 2019.

House prices in London, and in some commuter zones, have declined year-on-year.

He added that Nationwide expects United Kingdom house prices to rise at a low single-digit pace in 2019.

In London, the average house price in the fourth quarter of 2018 was £466,988 - 0.8% lower than the same period in 2017. "Price growth in the south... moderated throughout the year, while in the northern regions... price growth remained broadly stable in the 3 per cent to 4 per cent range". The price of a typical home in the south of England (£329,240) is still nearly double that in the north £166,642. "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".

Howard Archer, chief economic adviser at EY ITEM Club said: "The housing market ended 2018 very much on the back foot".

Jeremy Leaf, north London estate agent and former RICS residential chairman, commented: "The Nationwide numbers are one of the most comprehensive and well-established reports of housing market activity so command respect". That figure was also down 0.7 per cent month-on-month. "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".

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