House prices are “going nowhere” amid Brexit uncertainty and a looming General Election, according to experts, as an index showed annual growth in property values slumped to its lowest levels in over six years in October.
Across the UK, house prices were just 0.9% higher in October than a year earlier, according to the index from Halifax.
It marked the lowest rate of annual growth since April 2013 when the increase stood at 0.6%.
Across the UK, the average house price in October was £232,249 – 0.1% lower than in September.
Russell Galley, managing director, Halifax, said: “Average house prices continued to slow in October, with a modest rise of 0.9% over the past year.
“While this is the lowest growth seen in 2019, it again extends the largely flat trend which has taken hold over recent months.
“A number of underlying factors such as mortgage affordability and wage growth continue to support prices, however, there is evidence of consumers erring on the side of caution.
“We remain unchanged from our view that activity levels and price growth will remain subdued while the UK navigates economic uncertainty.”
— Howard Archer (@HowardArcherUK) November 7, 2019
Commenting on the Halifax report, Howard Archer, chief economic adviser at EY ITEM Club said: “UK house prices are currently going nowhere amid uncertain, challenging conditions, and it is hard seeing the situation changing until there is greater clarity over Brexit and (the) domestic political situation.”
He said that with the economy “largely struggling”, Brexit uncertainties and a looming General Election “it looks a racing certainty that the housing market will continue to find life challenging in the near term at least, keeping prices soft”.
Mark Harris, chief executive of mortgage broker SPF Private Clients, said: “This may be the lowest growth in house prices we have seen all year but it is no surprise as Brexit concerns, coupled with a General Election, are thrown into the mix. This trend is set to continue until both of these are resolved.
“Meanwhile, lenders remain extremely keen to lend, particularly as they look towards year-end and how much business they have done.
“Just when you think they can’t go any lower, rates have been cut further still, with five-year fixes available from less than 1.5%. That really is an astonishingly cheap rate for medium-term security.”
Gareth Lewis, commercial director of property lender MT Finance, said: “People have been cautious about making big decisions such as buying a home because of Brexit and are going to be even more so now with the General Election.
“If we have a hung Parliament there will be further frustrations to come.”
Jeremy Leaf, a north London estate agent and a former residential chairman of the Royal Institution of Chartered Surveyors (Rics) said the housing market is being supported by fewer but more serious buyers.
He said: “This is particularly the case with first-timers who are taking advantage of mortgage affordability and wage growth.”