United Kingdom: Housing market stays soft in October
According to the Nationwide Building Society (NBS), house prices in the United Kingdom rose 0.2% month-on-month in October, contrasting September’s 0.2% fall. On an annual basis, house prices rose 0.4%, up slightly from September’s 0.2% uptick. As such, this was the eleventh consecutive month with annual price growth of less than 1.0%. The average house price in October was GBP 215,368 (October 2018: GBP 214,534). The overall picture is broadly unchanged; the property market is in a prolonged soft spell, dampened by weak consumer sentiment and Brexit uncertainty.
The market is likely to stay subdued in coming months as Brexit uncertainty remains high. Moreover, if the weakness observed in the labor market in June-August proves persistent, this could feed through to the housing sector, as healthy labor conditions have been key in buttressing housing demand. Brexit developments will remain a key driver; while a departure from the European Union without a deal could dampen demand and see prices fall, a smooth withdrawal should support sentiment and see price growth pick up.