Nationwide report: House price growth slows to weakest in years

Prices fell 0.7% in the month of December, with outer Metropolitan and London regions both showing considerable declines in 2018.

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Nationwide has released its latest annual house price index report, addressing and measuring the price changes of residential housing.

According to the report, UK house prices took a pre-Brexit hit, with rises at an annual pace of 0.5% in December, the Nationwide building society has said, the slowest annual rate since February 2013.

Compared with a year earlier, prices rose by only 0.5% in December and followed a 1.9% increase in November.

Data revealed by the mortgage lender shows that ‘uncertainty’ over the economic outlook appears to be undermining confidence in the market.

Across the country, London and surrounding areas saw a small fall in house prices in 2018, with Northern Ireland showing the biggest house price rises, up 5.8%.

Prices in Wales climbed 4%, in Scotland they were up 0.9% and in England they rose 0.7%.

The Outer Metropolitan was the weakest performing region, with prices down 1.4% over the year.

London also continued to see modest price falls, with prices declining 0.8% during 2018 (the sixth quarter in a row in which the capital has recorded an annual house price decline).

The report also addresses Nationwide’s reaction, with the lender adding it expected prices to rise at a “low single-digit pace” in 2019, but its forecast was dependent on the economy continuing to grow modestly, something that looked “unusually uncertain”.

Commenting on the figures, Robert Gardner, Nationwide’s Chief Economist, said: “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.

“In particular, measures of consumer confidence weakened in December and surveyors reported a further fall in new buyer enquiries towards the end of the year.”

Further commenting on the recent release of reports, Lucy Pendleton, founder director of independent state agents, James Pendleton, added: “Britain’s almost back to square one as Brexit delivers a lost year.

“The Nationwide’s annual prediction wasn’t anything to write home about, but the UK has still undershot that by half.

“House prices soldiered on throughout 2018 and then threw their arms up and crawled over the line with just yards to go.

“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.

“A slew of buyer incentives has still resulted in a market at a virtual standstill.”