House prices have seen ‘next to no movement’ over past year
House prices have seen “next to no movement” over the past year, standing at just 0.8% higher annually in January, according to an index.
Across the UK, annual price growth slowed from 1.3% in December to 0.8% in January, Halifax said.
Property values tumbled by 2.9% month-on-month in January – reversing a surprisingly strong 2.5% increase in December.
The average house price now stands at £223,691.
Russell Galley, managing director at Halifax, said price growth is expected “to remain subdued in the near-term”.
He said: “Attention will no doubt be drawn towards the monthly fall of 2.9% from December to January, the second time in three years that we have seen a drop as a new year starts.
“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%.
“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.
“However, more fundamentally it is key underlying factors of supply and demand that will ultimately shape the market.”
Howard Archer, chief economic adviser at EY ITEM Club, 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.”
He said January’s drop was “clearly partly a correction” after house prices surprisingly spiked 2.5% month-on-month in December.
Mr Archer continued: “Caution over making major purchases will likely be magnified in the near-term by current heightened uncertainties over Brexit.”
Jeremy Leaf, a north London estate agent and a former residential chairman of the Royal Institution of Chartered Surveyors (Rics), said: “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.”
Mark Harris, chief executive of mortgage broker SPF Private Clients, 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.”