House prices faltered at the end of 2018 experiencing their slowest rate of growth in more than five years, the latest figures from Nationwide Building Society have revealed.
In the period between December 2017 and December 2018 houses across the UK increased in price by an average of just 0.5% according to the Nationwide House Price Index. This compared to a 2.7% rise in the same period the previous year.
Although it is a significant slump, these figures did not come as a surprise to Nationwide which said the market had been noticeably slowing down during previous months.
Robert Gardner, chief economist at Nationwide, said the indicators it used to assess how the housing market was progressing, such as properties bought and sold and numbers of mortgages approved, had been stable in recent months.
However, other pointers such as the measure of consumer confidence and new buyer inquiries suggested a weakening.
North-South divide
There were strong regional differences too. Northern Ireland experienced a steep rise with prices increasing by 5.8% in 2018, making it the top performing region.
Wales soared above the UK average with prices going up by 4% over 2018, compared to 3.3% in 2017. In Scotland things were more subdued with a 0.9% rise in the year. London experienced a price fall of 0.8% in 2018 but in northern regions prices were growing at between 3% and 4%.
Indeed, Nationwide said the narrowing north-south divide had become a strong theme of 2018. However, the price of a typical home in the south of England, at £329,240, is still nearly double the price of one in the north, at £166,642.
‘Wake up call’
Most industry experts agree Brexit and the uncertainty surrounding the UK’s departure from the EU was a major contributor to the slowdown.
Jeremy Leaf, north London estate agent and a former Royal Institution of Chartered Surveyors residential chairman, said: “The Nationwide numbers are one of the most comprehensive and well-established reports of housing market activity so command respect.
“Unfortunately, they are confirming a bit of a wake-up call for the housing market in that after steady progress, without much change one way or the other, prices have experienced a nasty bump.”
He added: “While it is never a good idea to judge one month’s figures in isolation, there is a substantial fall in price growth on an annual basis, as well as the monthly drop in prices, and reflects a time of particular political turmoil as we came towards the end of the year when the Brexit debate was reaching its height.”
