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Month-on-month, the average cost of a home in the UK stayed put this month
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On an annual basis, average prices have increased by just 0.6%
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Uncertainty over Brexit exerting drag on ‘sentiment and activity’, findings say
Average house prices did not budge an inch last month, while annual growth remains equally subdued, new figures show. For the ninth consecutive month, annual house prices rose by less than 1% in the year to August, creeping up just 0.6% to £216,096 on average.
‘Political uncertainty is likely to continue to exert a drag on sentiment and activity’ in the housing market, Robert Gardner, Nationwide’s chief economist, warned. While annual growth remains relatively sluggish, property prices still rose at the fastest pace for three months in the year to August, Nationwide’s figures reveal. The figures come days after data from UK Finance revealed that the number of people being approved for a mortgage hit the highest level for 10 years last month, suggesting the possibility of a no-deal Brexit has in fact spurred home-seekers and remortgages into action.
Even so, British house price growth has sagged since the 2016 Brexit referendum, particularly in London and neighbouring areas, while at a national level the market appears to have stabilised, a number of surveys suggest. The market is also eager to see what, if any, changes new Chancellor Sajid Javid, plans to make on stamp duty costs in future. Nationwide’s monthly index found that the average house price in August stood at £216,096, slightly down on July’s £217,663 average.
Commenting on Nationwide’s latest findings, Gardner said ‘While house price growth has remained fairly stable, there have been mixed signals from the property market in recent months. Surveyors report that new buyer inquiries 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.’
Gardner added that housing market trends remain ‘heavily dependent’ on developments in the broader economy. He said ‘In the near term, healthy labour market conditions and low borrowing costs will provide underlying support, though uncertainty is likely to continue to exert a drag on sentiment and activity.’
Howard Archer, chief economist adviser to the EY ITEM Club, said ‘With the economy struggling and the outlook currently highly uncertain, we suspect that house prices will remain soft despite the recent pick-up in housing market activity – which could well prove temporary.’
Meanwhile, another industry insider thinks the biggest problem in the market is the shortage of homes coming up for sale. Kevin Roberts, director of Legal & General Mortgage Club, said ‘There has been a great deal of innovation from mortgage lenders which has helped more first-time buyers to step onto the housing ladder. However, consumers still face challenges when it comes to buying a home. For some it’s the struggle of pulling together a big enough deposit, for others it’s about finding the right type of housing such as later life accommodation. The critical issue is that there are simply not enough homes to meet the demand from consumers, whether people buying their first property or those who want to downsize.’
Meanwhile, Lucy Pendleton, founder director of James Pendleton estate agents, believes that while buyers are ‘still all over property portals like a rash’, they simply ‘aren’t pulling the trigger.’ She added ‘The housing market’s two great foes remain Brexit and Stamp Duty.’.
Concerned about the Brexit saga, Jonathan Samuels, chief executive of property lender Octane Capital, said ‘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.’
[Source: Mail Online, 30 August 2019]
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