The rise in residential property prices was the lowest since 2013. The uncertainties associated with Brexit are significant.
According to the figures of the mutualist bank Nationwide, which refer to it, the average price of a property in the country rose by only 0.5% last year at the end of December, far from the 2.6% increase recorded in 2017, which had already slowed sharply compared to 2016.
The year-on-year price increase had not been that low since February 2013. As a sign of the market’s poor performance, prices even fell by 0.7% in December over a month, warns Nationwide.
The study highlights a further decrease at the end of the year in the number of purchase projects of potential buyers, as well as a lower number of properties placed on the market. “It is likely that the recent slowdown is due to the impact on buyer morale of economic uncertainty,” fuelled by the blurring of the contours of the Brexit scheduled for late March, notes Robert Gardner, an economist at Nationwide.
Price decline in London
Because in theory, without these fears, the real estate market should be supported by a very low unemployment rate, now significantly rising wages and still cheap borrowing.
Prices in London fell by an average of 0.8% in the fourth quarter over the year. They fell in the British capital for the sixth consecutive quarter. According to the latest official statistics available, the average price of a property in central London (“Inner London”) was down 2.9% year-on-year in October.
Nationwide also notes that the price gap between the north and south of the country is tending to narrow, with the largest increases recorded in, for example, Yorkshire and the northwest. However, the price of housing in the south is still almost twice as expensive as in the north. The average price of a house or apartment in London, the most expensive area in the country, was £466,988 (€517,829) in the fourth quarter of 2018, more than double the national average of £214,178.
Nationwide also expects residential real estate prices to continue to grow slightly in 2019, if the economy continues to grow modestly as it is currently. “The short-term outlook will depend very much on how quickly these uncertainties will be resolved,” says Robert Gardner. Economists agree that any forecast for 2019 for economic growth in the United Kingdom is very risky before it becomes clearer on Brexit.