House prices TUMBLE to biggest drop in NINE MONTHS as market braces for Brexit

Data from British bank Halifax showed they fell 2.9 percent month-by-month in January to £223,691, compared to a 2.5 percent rise in December to £230,430.

Despite this, house prices were up 0.8 percent in the three months to January compared to the same period a year ago.

But they remained largely unchanged over the course of the past 12 months, falling by just 0.8 percent from the price of £224,025 in January 2018.

Halifax managing director Russell Galley said price growth is expected “to remain subdued in the near-term”.

He warned the next year will be “important” for the housing market as the market braces itself for any potential impact from Brexit.

Mr Galley said: “Attention will no doubt be drawn towards the monthly fall of 2.9 percent from December to January, the second time in three years that we have seen a drop as a new year starts.

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“However, the bigger picture is actually that house prices have seen next to no movement over the last year, with annual growth of just 0.8 percent.

“This could either be viewed as a story of resilience, as prices have held up well in the face of significant economic uncertainty, or as a continuation of the slow growth we’ve witnessed over recent years.

“There’s no doubt that the next year will be important for the housing market with much of the immediate focus on what impact Brexit may have.

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“However, more fundamentally it is key underlying factors of supply and demand that will ultimately shape the market.”

Howard Archer, chief economic adviser at financial forecasting firm EY ITEM Club, warned caution around buying property will be “magnified in the near-term by current heightened uncertainties around Brexit”

He said: ”The Halifax reported house prices plunged 2.9% month-on-month in January, which was the second largest monthly drop (after April 2018) since September 2010.

“Caution over making major purchases will likely be magnified in the near-term by current heightened uncertainties over Brexit.”

Mark Harris, chief executive of mortgage broker SPF Private Clients agreed, warning the uncertainty around Brexit is seeing would-be-buyers “sit on their hands” until they know the impacts Brexit will have.

He said: “Flat growth is probably the best we can hope for given the current tricky political situation we find ourselves in.

“Brexit has caused a slowdown in purchase activity as would-be buyers sit on their hands, waiting for the outcome before committing to something as major as buying a new home.

“Fewer transactions has meant less business for lenders, yet they remain keen to lend.”

Jeremy Leaf, a former residential chairman of the Royal Institute of chartered Surveyors, added: “What we are seeing on the ground is the release of some pent-up demand prompting more listings, viewings and offers over the past few weeks than we dared hope for.

“However, interest is very patchy and real value must be perceived, otherwise little market change will result.

“Looking forward, we do not expect any significant improvement at least until the odds on a Brexit deal improve.”

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