Nationwide: Annual house price growth remains below 1%

Michael Lloyd

November 28, 2019

home sales

Weaker global growth and increased Brexit uncertainty has caused annual house price growth to remain below 1% for the 12th consecutive month in November at 0.8%, the Nationwide House Price Index has found.

However, this was the strongest outturn since April and house prices rose by saw monthly growth of 0.5% in November.

Robert Gardner, chief economist at Nationwide, said: “Indicators of UK economic activity have been fairly volatile in recent quarters, but the underlying pace of growth appears to have slowed as a result of weaker global growth and an intensification of Brexit uncertainty.

“To date, the slowdown has largely centred on business investment, while household spending has been more resilient.

“While activity slowed in the period immediately following the EU referendum, this was a continuation of a trend that was driven by the introduction of additional stamp duty on second homes earlier in that year.

“It appears that housing market trends have not traditionally been impacted around the time of General Elections.

“Rightly or wrongly, for most home buyers, elections are not foremost in their minds while buying or selling their home.”

Guy Harrington, chief executive of Glenhawk, added: “The annus horribilis that is 2019 continues.

“October’s marginally higher growth may reflect the market’s quietly increasing confidence that the General Election result may not be the disaster it feared, but overall it’s a case of ‘bring on the new decade’.

“Worryingly for UK vendors, with neither the Tory or Labour manifesto offering much cause for optimism, it may take more than a General Election and Brexit resolution to rouse the market from its deep slumber.”

Tomer Aboody, director of property lender MT Finance, said: “With the end of the calendar year upon us, it’s not unusual to see a slight uplift in activity in the housing market.

“This is particularly true this year, which may have something to do with the General Election and the prospect of a Conservative victory.

“If this is the outcome, it should finally bring an end to the sorry Brexit saga, which has held up the housing market for the past three years.

“There’s hope that a Conservative victory would have a further positive impact on the housing market with possible tweaking of stamp duty to follow, perhaps reducing it and getting the market moving again.

“Overall it’s giving the housing market a boost, which is much needed.”

Jonathan Samuels, chief executive of the property lender, Octane Capital, added: “The property market is hardly all guns-blazing but neither has it given up the ghost.

“Ultra-low borrowing rates and a deep-seated boredom around Brexit mean transaction levels continue to tick over.

“People have said enough is enough and are getting on with their lives, something that really shone through in November.

“While broader economic trends have dominated house price movements around elections in the past, this General Election has a whole new level of significance and could have a material impact on price trends in 2020 and beyond.

“A strong Conservative majority has the potential to reignite the market whereas a Corbyn-led coalition could see further atrophy and decline.

“In the General Election, the property market is fast approaching its most radical juncture for decades.”

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