House prices grow at lowest rate in six years

HOUSE-PRICE growth fell to a six-year low in August as subdued economic activity and stretched household budgets dragged month-on-month growth down by 0.5pc, the largest monthly decline since the London 2012 Olympics.

On an annual basis growth fell to 2pc, down from 2.5pc in July, according to Nationwide.

Annual house-price growth has remained within the 2-3pc range for the past 12 months, and the lender said it expects house prices to rise by about 1pc over the course of 2018.

A Reuters poll published earlier this week showed that economists expect house prices to increase nationally by 2pc this year and next. The average property price in Britain is now £214,745, down from £217,010 in July.

The Nationwide index is based on owner-occupier house-purchase transactions involving a mortgage. Buy-to-let and cash deals are not counted.

Jonathan Samuels, the chief executive of property lender Octane Capital, said there was a “blanket of uncertainty covering the UK property market at present”. “While the employment market remains strong, stubbornly high inflation, the potential for another rate rise, overstretched household finances and the growing possibility of a no-deal Brexit are seeding serious doubt in the minds of prospective buyers,” he said.

Lucy Pendleton, the founder of independent estate agent James Pendleton, said that Nationwide’s prediction of a 1pc increase in 2018 would mean average prices finish on just over £213,000, a level not seen since April and only around £1,500 lower than current prices.

“That would undo most of the year’s gains, so if that happens, expect the slowdown to feed into the Brexit mood music as the UK careers toward an uncertain future and possible hard Brexit in early 2019.”