Brexit fears blamed as house prices fall again

House prices fell for a third month in a row in May in what is the biggest sustained decline since the post-crisis slump of 2009. Fears over the impact of Brexit and the outcome of the general election, as well as a housing shortage, have been blamed for the slump. Prices across the country dropped by 0.2 per cent month-onmonth. This came after falls of 0.2pc in March and 0.3pc in April, according to data released by Nationwide.

HOUSE prices fell for a third month in a row in May in what is the biggest sustained decline since the post-crisis slump of 2009.

Fears over the impact of Brexit and the outcome of the general election have been blamed for the slump.

Prices across the country dropped by 0.2 per cent month-on-month. This came after falls of 0.2pc in March and 0.3pc in April, according to the data released by Nationwide.

House prices are still 2.1pc higher compared with this time last year, but this figure is the smallest measure of growth in four years.

Nationwide attributed the weakening to uncertainty around Brexit, as well as a rise in living costs and an affordability squeeze caused by historically high prices relative to incomes.

Russell Quirk, from the online estate agency emoov, said: “It’s fair to say that previous years were more routine than a snap election called in the middle of negotiations to leave the EU. House prices, along with the gap when compared to earnings, have continued to increase and such a pattern is unsustainable in the long term.”

Robert Gardner, a Nationwide economist, also said there was still a shortage of homes on the market and “subdued” levels of building could keep up house prices.

He added that high levels of employment – the jobless rate was at a 42-year low at the start of the year – would also help bolster prices.

However, he argued that the election was not likely to be a major factor in the market.

“Rightly or wrongly, for most home buyers, elections are not foremost in their minds while buying or selling their home,” Mr Gardner said.

House prices had stabilised in recent years after prolonged monthly declines in 2008 and 2009 following the financial crisis. The majority of monthly changes in the past three years have shown growth.