UK house prices grew by more than 1 per cent for the first time in a year last month, helped by a strong labour market that partially offset the negative effects of political uncertainty.
House prices rose 1.4 per cent in December 2019 compared to the same month the previous year, up from 0.8 per cent in November and the fastest annual pace since November 2018, according to Nationwide data released on Friday.
“Annual UK house price growth edged up as 2019 drew to a close, with prices 1.4 per cent higher than December 2018, the first time it has been above 1 per cent for 12 months,” said Robert Gardner, chief economist at Nationwide. “Healthy labour market conditions and low borrowing costs appear to have offset the drag from the uncertain economic outlook”.
Samuel Tombs, chief UK economist at Pantheon Macroeconomics said the rise was “another sign that the housing market is getting back on its feet”.
The annual rate accelerated despite a sluggish monthly increase of 0.1 per cent and price contraction in London.
In the three months to December, London house prices dropped 1.8 per cent compared to the same period in 2018, the worst performance of any region. In contrast, in Scotland house prices grew at the fastest pace at 2.8 per cent over the same period, marginally narrowing the large regional house price divide.
Despite the contraction, London house prices averaged £458,000 in the last three months of the year, compared to £152,000 in Scotland and £129,000 in the North of England.
Looking ahead economists expect some uptick in the UK housing market this year.
“With the UK General Election delivering a decisive result and the UK now set to leave the EU with Johnson’s deal on 31 January, the housing market may get a modest near-term leg up from reduced uncertainties,” said Howard Archer, chief economic adviser, at EY item club.