According to the latest Nationwide House Price Index, annual house price growth has slowed to 0.1%, the lowest since 2016.
Robert Gardner, Nationwide’s Chief Economist said, “Annual house price growth almost ground to a complete halt in January, with prices just 0.1% higher than the same time last year. This follows a subdued December when price growth slowed to 0.5%.
“Indicators of housing market activity, such as the number of property transactions and the number of mortgages approved for house purchase, have remained broadly stable in recent months, but forward-looking indicators had suggested some softening was likely.
“In particular, measures of consumer confidence weakened in December and surveyors reported a further fall in new buyer enquiries towards the end of 2018. While the number of properties coming onto the market also slowed, this doesn’t appear to have been enough to prevent a modest shift in the balance of demand and supply in favour of buyers in recent months.
“It is likely that the recent slowdown is attributable to the impact of the uncertain economic outlook on buyer sentiment, given that it has occurred against a backdrop of solid employment growth, stronger wage growth and continued low borrowing costs.
“Near term prospects will be heavily dependent on how quickly this uncertainty lifts, but ultimately the outlook for the housing market and house prices will be determined by the performance of the wider economy – especially the labour market.
“The economic outlook remains unusually uncertain. However, if the economy continues to grow at a modest pace, with the unemployment rate and borrowing costs remaining close to current levels, we would expect UK house prices to rise at a low single-digit pace in 2019.”
Founder and CEO of Yomdel, Andy Soloman said, “More of a case of the January purples than the January blues for the UK property market and following the seasonal slowdown of the festive season it seems to have lost almost all momentum heading into the New Year.
“This stagnation isn’t quite consistent with the wider economic picture but unfortunately for the nation’s homeowners, the Brexit inspired ups and downs that have plagued the market over the last year, seem to have remained as the UK continues in its struggle to leave.
“Going forward we should see a fairly muted performance in the short term, but mortgage rates remain low, wages are creeping up and employment growth is strong, and this will bring an air of stability and consistency if nothing else.”
Founder and CEO of OkayLah.co.uk, Paul Telford said, “We’ve seen some positive signs of resilience from the UK market so far this year, particularly within the mortgage sector, so this early stutter in price growth may come as a surprise to many.
“However, these initial indicators of an improvement in market health will take some time to filter through and given the turbulent year it has endured, the UK market can be forgiven for coming out of the blocks a little more lethargic than it may have in previous years.
“While buyer demand seems to be returning to the market, it’s also likely that we will see further caution and a reluctance to lower asking prices by UK home sellers over the coming months, which could further mute the level of price growth. Impending political outcomes will also continue to have an impact however, the market should find its feet and stabilise to a degree.”