United Kingdom: Housing market flounders in February
February 28, 2019
According to the Nationwide Building Society (NBS), house prices in the United Kingdom decreased 0.1% in February compared to the previous month in seasonally adjusted terms, contrasting January’s revised 0.2% increase (previously reported: +0.3% month-on-month). On an annual basis, house prices rose 0.4% in February, up from 0.1% in January. The average house price in February was GDP 211,304 (February 2018: GDP 210,402). Ongoing weakness in the housing market is likely linked to intense economic uncertainty in the run-up to the UK’s exit from the European Union and profound consumer pessimism.
Going forward, house prices are likely to increase mildly, supported by a strong labor market and still-low borrowing costs. However, the evolution of the EU withdrawal process will be key; a smooth withdrawal could lift the cloud of uncertainty currently hanging over consumers and boost prices, while a no-deal Brexit could depress the property market.
Author: Edward Gardner, Economist