Rupert Jones 

Brexit jitters grind UK housing market to a halt in August

Average house price dips to £216,096, says Nationwide, as buyer activity stalls
  
  

A pro-Brexit flag is attached to a window of a house in Carshalton, south of London.
Property experts say continued Brexit uncertainty means house price growth is unlikely to pick up this year. Photograph: Adrian Dennis/AFP/Getty

Brexit uncertainty is still weighing heavily on the UK housing market, which ground to a halt in August, and it could take a heavier toll in the coming months, analysts say.

Nationwide building society reported that house prices were flat in August as political and economic turbulence continued to take their toll. Average prices were in effect unchanged month on month once seasonal factors were taken into account, though the annual rate of property price growth nudged up to 0.6%, compared with 0.3% in July. Annual house price inflation has remained below 1% for nine consecutive months.

The average UK house costs £216,096, according to Nationwide, £1,567 less than the figure a month ago.

Robert Gardner, Nationwide’s chief economist, said the housing market’s fortunes would remain heavily dependent on developments in the broader economy, “though uncertainty is likely to continue to exert a drag on sentiment and activity”.

Surveyors were reporting that new buyer inquiries had increased a little, while data on the number of property sales pointed to a slowdown in activity, he said.

Hansen Lu, a property economist at the consultancy Capital Economics, said that with the probability of a no-deal Brexit rising, uncertainty was likely to intensify. “As a result, we suspect the rise in buyer demand has probably already ended. In turn, house price growth is unlikely to pick up again this year,” he said.

Many commentators said a flat market could almost be viewed as a positive when the wider political backdrop was so uncertain. Jonathan Samuels, the chief executive of the property lender Octane Capital, said: “Based on this week’s high political drama, it’s looking like August could be the quiet before the storm. Sentiment could come under a lot of pressure in the next 60 days. It’s buckle up the seatbelt time for UK bricks and mortar.”

Similarly, Jonathan Hopper, the managing director of Garrington Property Finders, said that as the Brexit drama intensified over the coming weeks, the property market would have to “hunker down and ride it out”.

He added: “More cautious buyers are battening down the hatches and waiting until the storm has passed before committing.”

Meanwhile, data from the Bank of England for the previous month, July, showed that the number of mortgages approved in the UK hit a two-year high.

UK lenders approved 67,300 mortgages in July, up from 66,500 in June. This was the highest figure since July 2017 but the Bank of England said it “remains within the very narrow range seen over the past two years … Mortgage market activity has remained stable.”

The increase may reflect some sellers accepting an offer to ensure the sale is completed before 31 October. Other buyers want to be in their new property before the new school year begins in the autumn.

 

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