‘Nasty bump’ helps level out house prices

Region bucks trend amid uncertainty

HOUSE PRICES in Yorkshire appear to have bucked the national trend by ending 2018 nearly four per cent higher than at this time last year, according to new figures.

Growth in the homes market slowed dramatically in the final few months, with the overall figure the weakest for nearly six years, Nationwide said.

But while houses across London and large swathes of the Home Counties are now worth up to 1.4 per cent less than 12 months ago, those in Yorkshire are worth an average of 3.7 per cent more.

Only Northern Ireland recorded a significantly bigger increase.

However, the average price of a Yorkshire home – £157,436, – is still less than half that in the fashionable south-east commuter belt that takes in Reading, Windsor and Maidenhead.

In other parts of the south, including Bedford, Brighton, Portsmouth and Southampton, prices remain at the same levels as those at the end of 2017. The average house price across the country in December was £212,281.

Robert Gardner, Nationwide’s chief economist, said the NorthSouth house price divide had narrowed last year.

But he added: “This trend was not entirely unexpected as it followed several years of sustained outperformance by the South, which left affordability more stretched in these areas.”

Weakened consumer confidence and fewer inquiries from new buyers had signalled a change in market conditions, he added.

“It is likely that the recent slowdown is attributable to the impact of the uncertain economic outlook on buyer sentiment, given that it has occurred against a backdrop of solid employment growth, stronger wage growth and continued low borrowing costs,” Mr Gardner said.

“Near term prospects will be heavily dependent on how quickly this uncertainty lifts, but ultimately the outlook for the housing market and house prices will be determined by the performance of the wider economy – especially the labour market.”

Howard Archer, chief economic adviser at the economic forecasting group EY ITEM Club, said the market had ended the year “very much on the back foot”.

He added: “Brexit and economic uncertainty may well have an increased dampening on housing market activity in the near term at least.”

Jeremy Leaf, a north London estate agent and a former residential chairman of the Royal Institution of Chartered Surveyors, called Nationwide’s figures “a bit of a wake-up call for the housing market”.

He said: “After steady progress, without much change one way or the other, prices have experienced a nasty bump.”

Mark Harris, chief executive of mortgage broker SPF Private Clients, said: “Lenders remain keen to lend and mortgage deals are competitive. As long as borrowers can meet affordability criteria, whether they are taking out a new mortgage or switching to another deal, there will be plenty to attract them for a while yet.”

Near term prospects will be dependent on how quickly uncertainty lifts. Robert Gardner, Nationwide’s chief economist.