House price growth picks up despite political uncertainty
Biggest monthly rise for 16 months but annual growth remains below 1%
House price growth has picked up despite on-going economic and political uncertainty, with the biggest monthly rise since July 2018.
According to Nationwide building society, the average price of a home rose by 0.5% in November, up from 0.2% in October. The average price is now £215,734.
The annual growth rate picked up to 0.8% from 0.4%, the highest since April. However, this means it has been stuck below 1% for months, below the rate of inflation, at 1.5%, and wage growth of 3.6%. The BBC says the market is “relatively stagnant”.
Jonathan Samuels, chief executive of property lender Octane Capital, said: "The property market is hardly all guns-blazing but neither has it given up the ghost.
David Westgate, chief executive at Andrews Property Group, told City AM that the data showed that the market “still has some fight in it”.
It was a different story before the EU referendum in June 2016, when house prices were rising at an annual rate of around 5%.
The fate of Brexit will dictate how prices develop, according to Howard Archer, chief economic advisor to the EY ITEM Club forecasting group.
He predicted that if the general election delivers a decisive result and the UK leaves the EU with a deal by 31 January, prices could rise by 2% in 2020. However, if Britain leaves the EU without a deal, house prices could quickly drop by 5%, Archer predicted.
However, Robert Gardner, Nationwide’s chief economist, said: “Past general elections do not appear to have generated volatility in house prices or resulted in a significant change in house price trends. On the whole, prevailing trends have been maintained just before, during and after UK general elections.”
Last week a Reuters poll found that UK house prices are not expected to match low inflation until 2021 and are set to fall in London this year.
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