UK house price growth slows amid Brexit uncertainty

House prices are rising at the slowest annual pace for six years according to Halifax, with ongoing political and economic uncertainty continuing to weigh on the market.

The bank’s latest quarterly House Price Index found that house prices rose at an annual rate of 1.5% in the three months to September, down from 1.8% in the previous quarter and the lowest rate recorded by the index since 2013.

In September, house prices were 1.1% higher than in the same month a year earlier, although on a monthly basis house prices fell by 0.4%. The average price of a property in the UK now stands at £232,574, the bank said.

Nationwide Building Society reported a slightly smaller 0.2% fall in prices in September, which it said takes the average price of a property in the UK to £215,352.

North South divide

The capital saw the sharpest drop in prices in the third quarter of the year, according to Halifax, with the South East and Eastern England also seeing price falls. Despite price falls in London, the cost of property there remains the highest in the UK, with an average property price of more than £480,000, nearly £160,000 more than in the South East, where the average property costs £323,055.

The best -performing region was Wales, whilst Northern England also saw strong gains, Halifax said. According to Nationwide, the strongest performing home nation in the third quarter of the year was Northern Ireland, with annual house price growth of 3.4%.

The cheapest areas to buy in the UK are the North East and Northern Ireland, Halifax’s data shows. In the North East, the average property price is £137,380 and in Northern Ireland, the average home costs £143,949. Prices in Northern Ireland are around £87,000 lower than at the start of the financial crisis in 2008.

House sales picking up

August saw a rise in UK home sales, according to latest HMRC monthly data. There were 99,890 properties sold in August, up 16% compared to July and the highest level since 2018. However, mortgage approvals fell by 2.2% in August, with 65,545 mortgages approved to finance house purchases.

Many homebuyers and sellers are adopting a “wait and see” approach in the run up to Brexit on 31st October. However, whilst transaction levels are lower than they have been, people are continuing to move, taking advantage of current low mortgage rates to keep costs down.

Robert Gardner, Nationwide’s chief economist, said: “Healthy labour market conditions and low borrowing costs appear to be offsetting the drag from the uncertain economic outlook.”