House prices grew at the slowest annual rate for nearly six years in January, according to the Nationwide Building Society.
The lender said price growth “almost ground to a complete halt”, with prices up by just 0.1% from a year earlier, “and cites “the uncertain economic outlook on buyer sentiment” as one of the key reasons for the demise.
Commenting on the figures, Robert Gardner, Nationwide’s Chief Economist, said:
“Annual house price growth almost ground to a complete halt in January, with prices just 0.1% higher than the same time last year. This follows a subdued December when price growth slowed to 0.5%.
“Indicators of housing market activity, such as the number ofproperty transactions and the number of mortgages approved for house purchase, have remained broadly stable in recent months, but forward-looking indicators had suggested some softening was likely.
“In particular, measures of consumer confidence weakenedin December and surveyors reported a further fall in new buyer enquiries towards the end of 2018. 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 in recent months.
Uncertainty exerting a drag on the market
“It is likely that the recent slowdown is attributable to the impact of the uncertain economic outlook on buyer sentiment, given that it has occurred against a backdrop of solid employment growth, stronger wage growth and continued low borrowing costs.
“Near term prospects will be heavily dependent on how quickly this uncertainty lifts, but ultimately the outlook for the housing market and house prices will be determined by the performance of the wider economy – especially the labour market.
“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.”