House prices fell in December to see 2018 out with a slowdown in annual growth, Nationwide’s latest report has revealed.
The building society’s new House Price Index shows that prices fell by 0.7% last month, with properties going for an average of £212,281, down from £214,044 in November. That means that prices rose by 0.5% in 2018 as a whole, compared to 2.6% for the 12 months to December 2017.
Nationwide’s chief economist Robert Gardner said the findings were not wholly unexpected, but that conditions may just be favouring buyers confident enough to make a move at a traditionally quiet time of year.
“Indicators of housing market activity, such as the number of property transactions and the number of mortgages approved for house purchases, have remained broadly stable in recent months, but forward-looking indicators had suggested some softening was likely,” said Mr Gardner.
“In particular, measures of consumer confidence weakened in December and surveyors reported a further fall in new buyer enquiries towards the end of the year. 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.”
A year-on-year rise of 1.9% in Nationwide’s November report was an improvement on the previous month, but Brexit continues to sow uncertainty in the market.
“The economic outlook is unusually uncertain,” Mr Gardner adds. “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.”
Northern Ireland market leads the way
The regional picture is varied, with prices in Northern Ireland performing the best in the UK with a growth rate of 5.8% in 2018. A home in the south of England averages £329,240, nearly double the average of £166,642 for a place in the north.
“The Nationwide numbers are one of the most comprehensive and well-established reports of housing market activity so command respect,” said Jeremy Leaf, north London estate agent and a former Royal Institute of Chartered Surveyors residential chairman.
‘Wake up call for market’
“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.
“Looking forward, this is always a fairly quiet time anyway for the market so the reasonable start we have had to business won’t be seen in the figures for at least the next month or so.”
