Lender expects housebuying and price growth to remain subdued amid Brexit uncertainty
Annual house price growth in the UK has slowed to the lowest pace in six years, according to Halifax, one of the country’s biggest mortgage lenders.
The average price of a house was £232,574 in September, down 0.4% from in August – the first monthly fall since May, Halifax said. Prices rose 1.1% year on year, marking the smallest annual gain since April 2013.
Russell Galley, the managing director of Halifax, said the latest figures remained “in keeping with the predominantly flat trend we’ve seen in recent months”. He said underlying market indicators, such as completed sales and mortgages approvals, were broadly stable. For buyers, important affordability measures including wage growth and interest rates still look favourable.
In the three months to September, house prices increased by 0.4%, up slightly from 0.1% in the three months to August.
However, Galley expected housebuying activity and price growth to remain subdued while economic uncertainty, around Brexit and the global outlook, persists.
The EY Item club forecasting group was more pessimistic, saying: “UK house prices are in the doldrums amid choppy, uncertain conditions.”
Howard Archer, the chief economic adviser to the group, estimates house prices could rise by 2% next year if the UK leaves the EU with an agreement on 31 October or early next year. The housing market could be given a lift if the government cuts stamp duty in the upcoming budget.
“However, the economy still looks set for a challenging 2020 even if there is a Brexit deal so that the upside for house prices is likely to be limited,” Archer said.
“If the UK leaves the EU without a deal on 31 October – or at a later date – we believe house prices could quickly drop around 5% amid heightened uncertainty and weakened economic activity.”
The monthly Halifax house price index is one of several that track the UK market, and has been higher than other measures. Nationwide building society said annual house price inflation slowed to 0.2% in September, while the Office for National Statistics, which uses Land Registry data, put it at 0.7% in July.