Home costs grew on the slowest price in nearly six years in November as wavering shopper confidence earlier than the UK’s departure from the EU took its toll on the housing market.
Costs grew by solely 0.3% within the yr to November, down from 1.5% in October, based on the Halifax home value index, revealed on Friday.
The final time the annual progress price of home costs was as weak was in December 2012, when the UK financial system was contracting.
The typical value of a UK residence was £224,578 in November, 1.4% decrease than the earlier month.
Samuel Tombs, the chief UK economist at Pantheon Macroeconomics, blamed “Brexit uncertainty” for the slowdown in value progress, at a time when unemployment stays close to four-decade lows and wages are exhibiting tentative indicators of accelerating quicker than inflation.
Halifax paints a weaker image of home value progress than different stories however most indicators utilized by economists level to a subdued market. Nationwide’s equal measure, revealed final week, confirmed home value progress of 1.9% within the yr to November, effectively under the common in recent times and solely barely above its lowest degree since Could 2013.
Housebuilder Berkeley Group on Friday warned that the short-term outlook is “clearly unsure as a result of ongoing Brexit course of and plenty of headwinds within the working atmosphere in London and the south-east”. The uncertainty has a “consequential hostile influence on funding ranges and transaction volumes”, Berkeley stated in a press release.
Even when the federal government manages to safe a Brexit transition deal, economists count on that greater borrowing prices because the Financial institution of England raises rates of interest and affordability issues will restrain future will increase in costs.
“The basics counsel that an acceleration in home value progress is unlikely,” stated Hansen Lu, a property economist at Capital Economics. “Home costs are nonetheless very excessive relative to incomes and that is unlikely to vary quickly.”