Annual house price growth lifts to 14-month high in January, index finds
Annual house price growth jumped to a 14-month high in January, according to an index.
Across the UK, property values were 1.9% higher than a year earlier, marking the strongest annual growth since November 2018, when it was also at 1.9%.
The average house price in January stood at £215,897 – 0.5% higher than in December – the index from Nationwide Building Society said.
Robert Gardner, Nationwide’s chief economist, said: “January saw a further modest pick-up in annual UK house price growth to 1.9%, from 1.4% in December.
“This follows 12 successive months in which annual price growth had been below 1%.
“Indicators of UK economic activity were fairly volatile for much of 2019, but the underlying pace of growth slowed through the year as a result of weaker global growth and an intensification of Brexit uncertainty.
“Recent data continue to paint a mixed picture. Economic growth appeared to grind to a halt as 2019 drew to a close, though business surveys point to a pick-up at the start of the new year.”
Mr Gardner continued: “The underlying pace of housing market activity has remained broadly stable, with the number of mortgages approved for house purchase continuing within the fairly narrow range prevailing over the past two years.”
Looking ahead, economic developments will remain a key driver of housing market trends, he said.
“Much will continue to depend on how quickly uncertainty about the UK’s future trading relationships lifts, as well as the outlook for global growth.
“Overall, we expect the economy to continue to expand at a modest pace in 2020, with house prices remaining broadly flat over the next 12 months.”
Some other economists are expecting to see stronger growth in house prices this year.
Highlighting other recent reports which have shown a recent jump in new buyer inquiries to estate agents, Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said: “Indicators of demand at the very start of the home-buying process are red hot.
“We think the pick-up in demand can be sustained this year by the continuation of low mortgage rates and solid wage growth, driving prices up by about 4%.”
Howard Archer, chief economic adviser at EY Item Club said: “While we suspect that the housing market may get a further near-term boost from reduced uncertainties, we remain relatively cautious over the sector’s overall prospects for 2020 and suspect that the upside may well be limited.
“Nevertheless, we have modestly raised our forecast for house price gains over 2020 to 2.8% from 2.0% and there is clearly a possibility that they could rise more than this.”
Mark Harris, chief executive of mortgage broker SPF Private Clients, said: “The resilience the housing market continues to show is encouraging, with yet another uptick in price growth in the year to January.”
Jeremy Leaf, a north London estate agent and a former residential chairman of the Royal Institution of Chartered Surveyors (Rics), said: “The real test for the market will come in February and March when we will see if that interest translates into higher transaction levels.
“Prices are likely to continue to be underpinned by a shortage of supply and relatively low levels of house-building, while ongoing difficulties trying to raise deposits – evidenced by the struggles still facing first-time buyers – will keep demand in check.”