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UK house prices take pre-Brexit hit, says Nationwide

UK house prices take pre-Brexit hit, says Nationwide

British house prices took a pre-Brexit hit in December, rising by their slowest pace in nearly six years in annual terms, according to data from the mortgage lender Nationwide. House prices fell by 0.7% from November, the biggest monthly fall since July 2012, Friday’s data showed. Compared with a year earlier, prices rose by only…

British house prices took a pre-Brexit hit in December, rising by their slowest pace in nearly six years in annual terms, according to data from the mortgage lender Nationwide.

House prices fell by 0.7% from November, the biggest monthly fall since July 2012, Friday’s data showed.

Compared with a year earlier, prices rose by only 0.5% in December – the slowest annual rate of growth since February 2013 – and followed a 1.9% increase in November. Both readings were below all forecasts in a Reuters poll of economists.

Nationwide said it expected prices to rise at a “low single-digit pace” in 2019 but its forecast was dependent on the economy continuing to grow modestly, something that looked “unusually uncertain”.

The prime minister, Theresa May, is struggling to overcome deep opposition in her own Conservative party to the Brexit divorce deal she agreed with other EU leaders, raising the prospect of an economically damaging no-deal departure from the EU in March.

Britain’s housing market has weakened since the June 2016 Brexit vote, led by price falls in London.

At the time of the referendum, Nationwide’s measure of house prices was rising by about 5% a year.

“Brexit has smashed property market sentiment to smithereens,” said Jonathan Samuels, the chief executive of the property lender Octane Capital.

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“Borrowing rates may be low and the jobs market strong but a deep undercurrent of uncertainty is causing the vast majority of people to sit on their hands.

“What growth there is, is in the north, which hasn’t experienced the overexuberant price inflation of the capital and other areas of the south.”

The Bank of England governor, Mark Carney, said last month that in the event of a “disorderly” departure from the EU – not the central bank’s base-case scenario – house prices could slump by 30% as part of a broader economic shock.

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