House prices shrugged off Brexit uncertainty to end 2019 1.4% higher than at the start of the year, according to Nationwide building society.
After 10 stagnant months, prices rose strongly in November and December to record the modest annual increase. The average UK house price in December was £215,282, Nationwide said. Property values edged up by 0.1% month on month.
Analysts said the figures indicated the housing market was “getting back on its feet” after a year of economic uncertainty. In October, rival mortgage lender Halifax said annual house price growth in the UK had slowed to the lowest pace in six years.
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 appeared to slow through the year as a result of weaker global growth and an intensification of Brexit uncertainty.”
Scotland was the strongest performer, with prices up by 2.8% in the fourth quarter of 2019, compared with a year earlier. It was the first time since 2008 that Scotland ended the year as the top performer, Nationwide said. The West Midlands recorded the second biggest increase at 2.7% for the year.
London was by far the weakest performer, with an annual house price decline of 1.8% in the fourth quarter. House prices in the home counties close to London barely rose – up 0.3%.
However, Gardner played down chances of a “Boris bounce” for the property market in 2020.
“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,” he said. “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.”
Halifax has forecast house price growth of 1%-3% in the coming year.
Mark Harris, the chief executive of mortgage broker SPF Private Clients, said the housing market had held up “remarkably well” in 2019.
“This has been assisted by strong employment, low mortgage rates and a lack of supply, which supported prices even in the face of considerable economic and political uncertainty,” he said.
“First-time buyers were the big success story of the year, steadily growing in number.”
Sam Harhat of Andrews Property Group said he believed many would-be buyers and sellers who had stayed out of the market would make their move in 2020.
“Transaction levels throughout 2019 were at a historical low,” he said.
The Nationwide said the challenge of raising a deposit to get on the property ladder remains a challenge even in the north of England and in Scotland, where property appears most affordable. It will still take someone earning the average wage and saving 15% of their take-home pay each month more than five years to save a 20% deposit in those areas.
In Wales and Northern Ireland it would take prospective buyers nearly seven years and in the West Midlands almost eight years, it said.
