The growth of property values slowed to a dismal 0.5% last year, figures from Nationwide Building Society suggest.
House price growth ground down to just 0.5%, much lower than the equivalent figure of 2.6% in 2017, according to Nationwide.
London and its metropolitan area suffered a decline in prices last year, while prices fell 0.7% across country in December 2018.
The building society blames “uncertainty” for the slowdown. Robert Gardner, Nationwide's chief economist, says the slowdown in house price growth comes despite a fairly robust economic picture.
“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” he says.
“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 table below shows the regional variations of house price growth in the last quarter of 2018 compared to the third quarter according to Nationwide:
|Region||Average Price (Q4 2018)||Annual % change Q4 2018||Annual % change Q3 2018|
|Yorks & H'side||£157,436||3.70%||5.80%|
Source: Nationwide Building Society, January 2019
‘Lots to be cheerful about’
Despite the indicators in the market pointing toward a general slowing of growth, more than one expert says there is cause for confidence for homeowners.
Mr Gardner appears modestly confident. He says: “The economic outlook is 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.”
This view is shared by Kevin Roberts, director of Legal & General Mortgage Club. He adds: “Throughout 2018, there was a steady slowdown in annual house price growth. Rather than the 4-5% rises of the past, October saw house price inflation fall to just 1.6%.
“This sustainable growth has helped aspiring homeowners, with recent figures showing more first-time buyers climbed onto the property ladder in the past year than any other time since 2006.
“Despite wider political uncertainty, as we enter 2019 there is clearly a lot to be cheerful about in the housing market and we hope to see even an even greater number of buyers take their first steps onto the ladder.”