Average annual house price growth was 1.9% in January, says Nationwide
UK house prices rose at their fastest rate in 14 months, suggesting that confidence has returned to the market following the General Election in December.
Annual house prices rose by 1.9% in January – up from 1.4% the previous month, according to the latest Nationwide House Price Index.
This follows twelve 12 successive months in which annual price growth has been below 1%.
On a monthly basis, house price growth rose by 0.5% in January, taking the average UK house price to £215,897.
Robert Gardner, Nationwide's chief economist, says: “Indicators of UK economic activity were fairly volatile for much of 2019, but the underlying pace of growth slowed through the year as a result of weaker global growth and an intensification of Brexit uncertainty.
“Recent data continue to paint a mixed picture. Economic growth appeared to grind to a halt as 2019 drew to a close, though business surveys point to a pickup at the start of the new year.
“The underlying pace of housing market activity has remained broadly stable, with the number of mortgages approved for house purchase continuing within the fairly narrow range prevailing over the past two years. Healthy labour market conditions and low borrowing costs appear to be offsetting the drag from the uncertain economic outlook.”
With uncertainty now lifted following the General Election, some analysts believe there will be a ‘Brexit bounce’, with property prices surging.
Samuel Tombs, chief economist at Pantheon Macroeconomics, says: “Indicators of demand at the very start of the home-buying process are red hot.
“We think the pick-up in demand can be sustained this year by the continuation of low mortgage rates and solid wage growth, driving prices up by about 4%.”
However, Howard Archer, chief economic adviser at EY Item Group, remains cautious.
He says: “Certainly, there is compelling evidence that the housing market has had an initial leg-up from increased optimism and reduced uncertainties following the decisive General Election result as well as greater near-term clarity on Brexit with the UK now leaving the EU on 31 January with a deal.
“While we suspect that the housing market may get a further near-term boost from reduced uncertainties, we remain relatively cautious over housing market prospects over 2020 and suspect that the upside will likely be limited.”