House prices stagnate amid Brexit uncertainty, ending 15 months of growth

Lack of supply and record low interest rates prevent values from slipping into reverse

House prices have stayed level from September to October

Fifteen consecutive months of house price growth in the UK have come to an end, according to Nationwide’s latest figures.

UK house prices were flat in October but rose 4.6 per cent on an annual basis, slowing from 5.3 per cent for the year to September. Despite the slow-down, house price growth is still outstripping pay-rises.

Nationwide said housing activity remained “fairly subdued,” with transactions about 10 per cent down from a year earlier.

“While the economic outlook is uncertain, solid labour market conditions and historically low borrowing costs should provide support to buyer confidence,” said Robert Gardner, chief economist at Nationwide.

“Moreover, the relatively low number of homes on the market and modest rates of housing construction are likely to keep the demand/supply balance fairly tight, even if economic conditions weaken in the quarters ahead, as most forecasters expect.”

Property experts JLL predict the market will stagnate this year, with prices growing just 0.5 per cent as Brexit weighs on people’s buying decisions.

Mortgage approvals have declined since the start of 2016, and the British Bankers Association said in October that the property market “continues to show signs of underlying weakness.”

Restrained supply has kept house prices afloat despite economic uncertainty causing weakened demand in recent months.

The Government is still falling short of its pledge to build one million homes, with just 142,390 completions in England and Wales in 2015.

Ministers on the Public Accounts Committee pressed the Government to “accelerate significantly” the sale of public land so more homes can be built. Official figures show departments have released land for just 8,580 homes, or 5 per cent of the 160,000 target set last year.