House prices grew at the slowest annual rate for nearly six years in January, according to Nationwide, which says the market has “almost ground to a complete halt.”
Prices are now up by just 0.1 per cent from a year ago, down from 0.5 per cent recorded in December. The average UK property price is now £211,966.
The last time Nationwide's annual price growth measure was in worse shape was in February 2013 when it registered zero growth.
Almost inevitably, the cause of concern revolves around Brexit: the Nationwide says the marked slowdown is due to "the impact of the uncertain economic outlook on buyer sentiment”.
It says this uncertainty among buyers outweighs more positive news in the shape of "solid employment growth, stronger wage growth and continued low borrowing costs”.
But all is not lost according to Robert Gardner, Nationwide's chief economist: "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.”
Jeremy Leaf, north London estate agent and a former RICS residential chairman, says: “These figures confirm a market struggling to weather the Brexit storm but not collapsing. The fall in December has been replaced by a modest rise in January but this is probably just as much to do with shortage of stock as release of some inevitable pent-up demand in the post-Christmas period.
“There are probably too many potential bumps on the road to give a clear steer as to the future direction of prices and activity but what is apparent is that there remains a determination among a good number of serious buyers and sellers to find a way of moving on.”
And Mark Harris, chief executive of mortgage broker SPF Private Clients, says despite the uncertainty, the financial services sector is keen to lend: “Those who are in the market for a new mortgage or remortgage will find plenty of attractive deals, with many lenders cutting rates in the past couple of weeks or tweaking criteria. We expect pricing to remain low in the coming weeks as lenders compete for somewhat limited business in very uncertain times.”