House prices stagnate amid Brexit uncertainty, ending 15 months of growth

Lack of supply and record low interest rates prevent values from slipping into reverse

Ben Chapman
Wednesday 02 November 2016 18:05
Comments
House prices have stayed level from September to October
House prices have stayed level from September to October

Fifteen consecutive months of house price growth in the UK have come to an end, according to Nationwide’s latest figures.

UK house prices were flat in October but rose 4.6 per cent on an annual basis, slowing from 5.3 per cent for the year to September. Despite the slow-down, house price growth is still outstripping pay-rises.

Nationwide said housing activity remained “fairly subdued,” with transactions about 10 per cent down from a year earlier.

“While the economic outlook is uncertain, solid labour market conditions and historically low borrowing costs should provide support to buyer confidence,” said Robert Gardner, chief economist at Nationwide.

“Moreover, the relatively low number of homes on the market and modest rates of housing construction are likely to keep the demand/supply balance fairly tight, even if economic conditions weaken in the quarters ahead, as most forecasters expect.”

Property experts JLL predict the market will stagnate this year, with prices growing just 0.5 per cent as Brexit weighs on people’s buying decisions.

Mortgage approvals have declined since the start of 2016, and the British Bankers Association said in October that the property market “continues to show signs of underlying weakness.”

Restrained supply has kept house prices afloat despite economic uncertainty causing weakened demand in recent months.

The Government is still falling short of its pledge to build one million homes, with just 142,390 completions in England and Wales in 2015.

Ministers on the Public Accounts Committee pressed the Government to “accelerate significantly” the sale of public land so more homes can be built. Official figures show departments have released land for just 8,580 homes, or 5 per cent of the 160,000 target set last year.

Register for free to continue reading

Registration is a free and easy way to support our truly independent journalism

By registering, you will also enjoy limited access to Premium articles, exclusive newsletters, commenting, and virtual events with our leading journalists

Please enter a valid email
Please enter a valid email
Must be at least 6 characters, include an upper and lower case character and a number
Must be at least 6 characters, include an upper and lower case character and a number
Must be at least 6 characters, include an upper and lower case character and a number
Please enter your first name
Special characters aren’t allowed
Please enter a name between 1 and 40 characters
Please enter your last name
Special characters aren’t allowed
Please enter a name between 1 and 40 characters
You must be over 18 years old to register
You must be over 18 years old to register
Opt-out-policy
You can opt-out at any time by signing in to your account to manage your preferences. Each email has a link to unsubscribe.

By clicking ‘Create my account’ you confirm that your data has been entered correctly and you have read and agree to our Terms of use, Cookie policy and Privacy notice.

This site is protected by reCAPTCHA and the Google Privacy policy and Terms of service apply.

Already have an account? sign in

By clicking ‘Register’ you confirm that your data has been entered correctly and you have read and agree to our Terms of use, Cookie policy and Privacy notice.

This site is protected by reCAPTCHA and the Google Privacy policy and Terms of service apply.

Register for free to continue reading

Registration is a free and easy way to support our truly independent journalism

By registering, you will also enjoy limited access to Premium articles, exclusive newsletters, commenting, and virtual events with our leading journalists

Already have an account? sign in

By clicking ‘Register’ you confirm that your data has been entered correctly and you have read and agree to our Terms of use, Cookie policy and Privacy notice.

This site is protected by reCAPTCHA and the Google Privacy policy and Terms of service apply.

Join our new commenting forum

Join thought-provoking conversations, follow other Independent readers and see their replies

Comments

Thank you for registering

Please refresh the page or navigate to another page on the site to be automatically logged inPlease refresh your browser to be logged in