The Nationwide Building Society has reported that house price growth remained subdued in September.
There was a 0.2% price fall during the month, after taking account of seasonal factors.
The house price index fond that annual price declines have persisted in London and the South East.
Robert Gardner, Nationwide’s chief economist, said: “UK annual house price growth almost ground to a halt in September, at just 0.2%. This marks the tenth month in a row in which annual price growth has been below 1%.
“Indicators of UK economic activity have been fairly volatile in recent quarters, but the underlying pace of growth appears to have slowed as a result of weaker global growth and an intensification of Brexit uncertainty. However, the slowdown has centred on business investment – household spending has been more resilient, supported by steady gains in employment and real earnings.
“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.
“Northern Ireland remained the strongest performing home nation in Q3, though annual price growth moderated to 3.4% (from 5.2% in Q2). Wales also saw a slowdown to 2.9%, from 4.2% last quarter. Annual price growth in Scotland remained subdued at 0.8% (up slightly from 0.4%). England remained the weakest performing home nation, with prices essentially flat compared with a year ago.
“London was the weakest performing region in Q3, closely followed by the surrounding Outer Metropolitan region, with annual price declines of 1.7% and 1.5% respectively. While this marks the ninth quarter in row price that prices have fallen in the capital, they are still only around 5% below the all-time highs recorded on Q1 2017 and c50% above their 2007 levels (UK prices are only around 17% higher than their 2007 peak). Elsewhere in England, annual price growth remained relatively weak in Q3, with the North West the best performing region, with a 2.5% year-on-year rise.
“House price growth across northern England (North, North West, Yorkshire & Humberside, East Midlands and West Midlands) slowed to 1.4%, but remained ahead of that in the south (London, Outer Metropolitan, Outer South East and East Anglia), which experienced a 0.8% fall in Q3. These trends are not entirely unexpected, however, as affordability is still more stretched in the south, with prices further above their pre-financial crisis levels, as shown below.”
Lucy Pendleton, founder director of independent estate agents James Pendleton, said: “Such low growth means September is set to be the 14th month in a row in which property has lost value in real terms.
“The last time growth even equalled CPI was in July 2018 when both measures were running at 2.5% year on year. The last time the property market was ahead was in April 2018.
“What this means is that there’s no mistaking this trend as a flash in the pan and it is being solidly reflected in buyer and vendor behaviour, particularly in London.
“As a result, on the doorstep in the capital, the smart money is keen to adapt and these sellers are now going much further much quicker in terms of discounting their properties to secure the one they are buying at the right price too. Their reward is a transaction that goes through in a couple of months rather than a couple of quarters.
“It’s true though that some people have found it hard to adjust so there are still a few stragglers out there.”