United Kingdom: Housing market wanes in January
January 31, 2019
According to the Nationwide Building Society (NBS), house prices in the United Kingdom increased 0.3% in January compared to the previous month in seasonally adjusted terms, contrasting December’s 0.7% fall. On an annual basis, house prices rose a mere 0.1%, down notably from December’s 0.5% rise. The average house price in January was GBP 211,966 (January 2018: GBP 211,756). The recent weakening in the housing market is likely linked to intense economic uncertainty and soft consumer confidence, despite healthy wage and employment figures in recent months.
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: Oliver Reynolds, Economist