This is why house prices have grown at their strongest annual rate since July 2018

The UK’s annual house price growth rose to to 2.3 per cent in February, from 1.9 per cent in January, the strongest rate for 18 months, according to the Nationwide.
The decisive election outcome may be boosting buyer sentiment, said the Nationwide  Photo:  Rui Vieira/PA WireThe decisive election outcome may be boosting buyer sentiment, said the Nationwide  Photo:  Rui Vieira/PA Wire
The decisive election outcome may be boosting buyer sentiment, said the Nationwide Photo: Rui Vieira/PA Wire

Robert Gardner, Nationwide’s Chief Economist, said, that while overall economic growth ground to a halt in the final three months of 2019, labour market conditions remained buoyant and borrowing costs are low.

He added: “The decisive election outcome may have provided a boost to buyer sentiment.

Hide Ad
Hide Ad

“Recent data releases indicate that the housing market has gathered momentum in recent months and the latest house price figures are in line with that trend. The number of residential property transactions and mortgages approved for house purchase increased around the turn of the year and surveyors have reported an increase in new buyer enquiries.

“Looking ahead, economic developments will remain the key driver of housing market trends and house prices. Business surveys suggest that activity recovered in the New Year, but there are still significant uncertainties that threaten to exert a drag on the economy in the coming quarters.

“The global economic backdrop remains challenging, with the coronavirus outbreak expected to weigh on global activity in the coming quarters. Investment is likely to remain subdued until the UK’s future global trading relationships become clearer, which is unlikely until early next year.

“Overall, we expect the UK economy to continue to expand at a modest pace in 2020, with house prices remaining broadly flat in 2020 as a whole.”

Hide Ad
Hide Ad

The latest detailed data from the ONS Wealth and Assets Survey shows that total household net wealth - after deducting outstanding debt - amounted to almost £14.6 trillion over the April 2016 to March 2018 period. This is equivalent to around 6.8 times the value of the UK economy’s total output in 2018.

Andrew Montlake, Managing Director of the mortgage broker, Coreco, said: “Now that the Brexit burden has been lifted, the property market is feeling significantly more upbeat.

“There are more buyers, more properties coming onto the market and mortgages that are about as competitive on price as it gets.

“We’re by no means out of the woods yet, as trade negotiations with the EU could easily turn sour and hit sentiment, and there’s the small matter of the March Budget, but for now the tempo of the market is improving by the day.

Hide Ad
Hide Ad

“Even though asking prices are higher than they were in the closing stages of 2019, for now buyers are playing ball given the extremely low cost of borrowing.

“First time buyers are particularly active as they are the ones who will lose out the most if property prices start to run away.

“We expect to see more transactions and a pick up in the rate of price growth during 2020 but the trade negotiations taking place in the background should keep the property market honest.”

Related topics:

Comment Guidelines

National World encourages reader discussion on our stories. User feedback, insights and back-and-forth exchanges add a rich layer of context to reporting. Please review our Community Guidelines before commenting.