House price growth slows to lowest level in six years as Brexit uncertainty weighs on market

Homes are becoming more affordable – but people are unwilling to make big commitments like buying property while the political situation remains unclear

Caitlin Morrison@citycait
Friday 07 December 2018 11:55
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UK house price growth in November marked the lowest rate recorded in six years, according to the latest Halifax House Price Index.

Property prices in the three months from September to November fell 1.1 per cent compared with the preceding quarter, while prices dropped 1.4 per cent between October and November.

Meanwhile, the rate of growth dropped to 0.3 per cent, the lowest rate since December 2012.

Russell Galley, managing director at Halifax, said: “High employment, wage growth and historically low mortgage rates continue to make home ownership more affordable for many, though the need to raise a significant deposit still acts as something of a restraint on the market.

“This is largely offset by relatively limited supply of new and existing properties for sale, which continues to sustain house prices nationally.”

A number of property experts said continued uncertainty around Brexit was weighing on the market, with people unwilling to make decisions on property purchases while the future of the country’s economy is still unclear.

Mike Scott, chief property analyst at estate agent Yopa, said: “The usual Christmas slowdown in the housing market has started early this year, as people wait for the outcome of the current political turmoil before making long-term commitments, such as buying a new home.”

Jeremy Leaf, a north London estate agent and a former residential chairman of the Royal Institution of Chartered Surveyors, said: “Looking forward, we don’t expect activity to change much, bearing in mind seasonal and political distractions. On the ground, lethargy is replacing energy.”

Gary Barker, chief executive of proptech company Reapit, also predicted a continuation of the current subdued performance.

“Transactions have been flat for the past three years, and caution is likely to remain whilst Brexit remains unfinished. Furthermore, if Brexit stalls, or more significant uncertainty over the government develops, it will be a painful road ahead,” he said.

Mr Barker said that there could be room for optimism: “We are seeing house price reduction in some areas, which could make property more affordable and also boost the economy by increasing spending power and buying capacity.

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“If the Brexit deal passes through parliament, we could potentially see a much more confident market, resulting in more transactions, fewer withdrawals, and increased prices.”

However, he added: “If the Bank of England’s forecast of a 30 per cent drop in house prices comes to fruition following a no-deal Brexit, the balance of the market will shift dramatically.

“Although transactions may reduce significantly, with depressed prices discouraging sellers from listing their properties, low prices will put buyers back in control. First-time buyers, in particular, could benefit from slashed prices, giving them a leg-up onto the property ladder.”

Additional reporting by newswires

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