House price continue to grow but hit near six-year lows

house price drop

UK house prices grew at the slowest annual rate for nearly six years in January, according to the Nationwide.

The lender said price growth “almost ground to a complete halt”, with prices up by just 0.1% from a year earlier, down from a rate of 0.5% in December.

The average property price was £211,966, the building society said.

The Nationwide said it was likely that the recent slowdown in the market was due to “the impact of the uncertain economic outlook on buyer sentiment”.

It said this uncertainty among buyers was outweighing the otherwise positive backdrop of “solid employment growth, stronger wage growth and continued low borrowing costs”.

The last time the Nationwide’s annual price growth measure was weaker was in February 2013, when it registered zero growth.

The Nationwide survey, which is based on its own lending data, showed that house prices rose by 0.3%, accounting for seasonal factors, in January compared with December. There was no change in prices in the three months to the end of January compared with the previous quarter.

Earlier in January, a survey by the Royal Institution of Chartered Surveyors (RICS) found their members thought the outlook for the housing market over the next three months was the worst for 20 years.

A net balance of 28% of RICS members expected sales to fall, the most downbeat reading since records started in October 1998.

Robert Gardner, Nationwide’s chief economist, said: “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.”