Properties are becoming more affordable but economic uncertainty is still putting buyers off, according to the latest report by Nationwide building society.
House price growth in the UK has picked up despite continued economic and political uncertainty, but remains far below the levels seen before the EU referendum. The average price of a home rose by 0.5% in November to £215,734, according to Nationwide. This is the biggest monthly rise since July 2018, and up from 0.2% in October. The annual growth rate picked up to 0.8% from 0.4%, the highest since April.
However, annual house price growth remains below 1%, where it has been stuck for the past 12 months. This is below the rate of inflation, at 1.5%, and wage growth of 3.6%. Before the June 2016 Brexit vote, house prices were rising at an annual rate of around 5%.
This means properties have become more affordable, but the heightened economic and political uncertainty created by Brexit and the global slowdown is putting off potential buyers. The labour market has also weakened lately, with pay growth slowing and employment falling by 58,000 in the three months to September, its biggest fall in four years.
Robert Gardner, Nationwide’s chief economist, said indicators of UK economic activity had been volatile, “but the underlying pace of growth appears to have slowed as a result of weaker global growth and an intensification of Brexit uncertainty. To date, the slowdown has largely centred on business investment, while household spending has been more resilient.”