Property supply and demand, not Brexit, will shape the UK's housing market in 2019 says latest price index
House prices were virtually unchanged on an annual basis in January, the latest House Price Index reveals.
According to Halifax, the average price of a home in January had increased by just 0.8% compared with the same month in 2018, below December 2018’s year-on-year rate of 1.3%.
The fall in the annual rate is the result of a 2.9% monthly drop in prices between December and January, with the bank highlighting this as the second month-on-month decrease at the beginning of a new year in the last three years.
This compares with a 2.5% increase in prices between November and December, with the average home now costing £223,691.
House prices also slipped down on a quarterly basis, with the average cost of a property declining by 0.6% in the last quarter (November-January) since the previous three months.
Russell Galley, Managing Director of Halifax, commented that whilst attention will be on Brexit in the coming months, the imbalance between housing stock and demand will dictate future growth, saying:
“Attention will no doubt be drawn towards the monthly fall of -2.9% from December to January, the second time in three years that we have seen a drop as a new year starts. However, the bigger picture is actually that house prices have seen next to no movement over the last year, with annual growth of just 0.8%.
“There’s no doubt that the next year will be important for the housing market with much of the immediate focus on what impact Brexit may have. However, more fundamentally it is key underlying factors of supply and demand that will ultimately shape the market.”
New housing completions increased by 1% in 2018, whilst registrations saw a slight fall of 0.5% in the year, according to the latest figures from the National House Building Council (NHBC).