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Britain's property market set for another bleak year as Brexit bites

UK house price growth has stalled and there’s little hope for uplift in 2019. Photo: Matthew Horwood/Getty Images
UK house price growth has stalled and there’s little hope for uplift in 2019. Photo: Matthew Horwood/Getty Images

British homeowners could be in for another disappointing year as Brexit uncertainty threatens to sap all enthusiasm out of the property market in 2019.

New housing market data released on Thursday paints a bleak picture:

Nationwide reported that house price increases all but stopped in January, making it the worst month for price growth in six years.

“Annual house price growth almost ground to a complete halt in January, with prices just 0.1% higher than the same time last year,” said Nationwide’s chief economist Robert Gardner.

“The economic outlook remains unusually uncertain,” he said, noting that prices weren’t budging despite “a backdrop of solid employment growth, stronger wage growth and continued low borrowing costs.”

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He predicts that average housing prices would only get a meagre “low single-digit” uplift in 2019 and that’s only if the economy keeps growing at a modest pace and unemployment rates and borrowing costs remain steady.

Average annual house price growth was around 2% in 2018, slightly weaker than in 2017, according to Nationwide data. This contrasts sharply with the boom days of mid-2014, when average house prices were rising by more than 11%.

Foxtons Group (FOXT.L) CEO Nic Budden also issued a fresh warning on Thursday, saying 2018 was painful and this year isn’t looking any better.

Profit at the estate agent, before stripping out taxes and other items, slumped by 80% to just £3m last year. And that relatively small profit was then wiped out almost entirely with a £3m cash charge for closing up branches.

“2018 was one of the toughest sales markets we have ever had in London with transactions falling from last year’s historically low levels,” he said in a written statement. “Looking ahead, we expect trading conditions in the sales market to remain challenging throughout 2019.”

However, there were still some standout bright spots amidst the market gloom. Wales saw buoyant residential price growth in 2018 after the Welsh government scrapped the stamp duty system. In particular, the small Welsh city of Newport experienced double-digit house price gains last year, bucking the overall trend.

READ MORE: The cities with the fastest rising house prices in 2018

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