Optimism returns to the market as house price growth gains 1.9%
Before December, annual growth had settled below 1% for twelve 12 consecutive months. House prices saw a monthly rise of 0.5% after taking account of seasonal factors.
Robert Gardner, Nationwide’s chief economist, said: “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 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 pickup at the start of the New Year. Labour market data was surprisingly upbeat in the three months to November, with the economy adding over 200,000 jobs – the largest gain since the end of 2018.
“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. Healthy labour market conditions and low borrowing costs appear to be offsetting the drag from the uncertain economic outlook.
“Looking ahead, economic developments will remain the key driver of housing market trends and house prices. 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.”
Miles Robinson, Head of Mortgages at online mortgage broker Trussle, comments: “House price growth has increased modestly from December 2019, up to 1.9% from 1.4%. Despite just a slight increase, this could show signs that the housing market is beginning to pick up following a year of political and economic uncertainty.
“Last year, mortgage lending was at its highest since 2009. This is likely to be as a result of the historically low interest rates, fuelling competitive mortgage deals, and increasing the options available to would-be buyers.
“Following last month’s election, people may begin to start having more confidence in the mortgage market. This, coupled with the strong foundation of mortgage lending in 2019, could provide a very solid base for the housing market over the next year.”