House prices dipped in September compared with a month earlier, while annual growth is at its weakest in six and a half years, according to Halifax.
Compared with August, prices were 0.4 per cent lower – the biggest fall since April. The average UK house price of £232,574 was 1.1 per cent higher than in September 2018 – the smallest rise since April 2013.
“Looking ahead, we expect activity levels and price growth to remain subdued while the current period of economic uncertainty persists,” said Russell Galley, managing director at Halifax.
The data, based on an updated methodology since last month, included some revisions to previous changes in house prices. For example, the monthly rise in August was revised down to 0.2 per cent from 0.3 per cent.
“The Halifax measure has tended to be at the top end of house prices, although much less so since it recently revamped its index,” said Howard Archer, chief economic adviser to the EY ITEM Club.
He pointed out that Nationwide’s index showed only a 0.2 per cent annual price rise in September, while the latest official data put the annual growth rate at 0.7 per cent in July.
“With the economy largely struggling and the outlook highly uncertain, we suspect that house prices will remain soft in the near term at least,” Mr Archer added. “Consequently, we expect house prices to only rise around 1 per cent on most measures over 2019.”
He forecasts that if Britain leaves the EU without a deal on 31 October or at a later date, house prices could quickly fall by around 5 per cent. In contrast, if there is a Brexit agreement, prices will rise around 2 per cent next year.
“However, the economy still looks set for a challenging 2020 even if there is a Brexit deal, so the upside for house prices is likely to be limited,” Mr Archer noted.
