United Kingdom: Housing market softens in October
October 30, 2018
According to the Nationwide Building Society (NBS), house prices in the United Kingdom were flat in October compared to the previous month in seasonally adjusted terms, contrasting September’s 0.2% increase. On an annual basis, house prices rose a mere 1.6% in October, down from September’s 2.0% and marking a multi-year low. The average house price in October was GBP 214,534 (October 2017: GBP 211,085). Weaker activity in the housing market came amid souring consumer sentiment and rising Brexit uncertainty, which likely put a dampener on demand.
Going forward, house prices are likely to continue to increase at a mild rate, underpinned by tight supply. In addition, a gradual recovery in real wages should support demand. However, pessimistic consumer sentiment will likely weigh on the market. Interest rates and the outcome of Brexit negotiations will be important factors to watch going forward.
Author: Oliver Reynolds, Economist