U.K. House Price Growth Stays Subdued as Brexit Woes Persist
However, a shortage of homes, record employment and low interest rates are preventing a sharp downturn.
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U.K. house-price growth stayed subdued in April in a sign the delay to Brexit failed to reinvigorate the market, according to Nationwide Building Society.
Values rose 0.9 percent last month from a year earlier, still well below levels seen in 2018, the firm said Wednesday. On the month, prices rose 0.4 percent to an average of 214,920 pounds ($280,000). A separate report from the Bank of England underscored the property market malaise, showing mortgage lending unexpectedly fell in March.
The data is the first from Nationwide since the government secured an extension to its Brexit deadline until October, and provides few signs that the housing market may significantly benefit from the delay. While uncertainty about the future relationship with the European Union has hurt growth in recent months, a shortage of homes, record employment and low interest rates are preventing a sharp downturn.
Households are growing more cautious about taking on debt for other uses. Unsecured credit grew at its weakest pace in more than five years due to a drop in lending for car purchases and more subdued borrowing on credit cards, the BOE said.
“Measures of consumer confidence weakened around the turn of the year and surveyors report that new buyer inquiries have remained subdued,” said Robert Gardner, Nationwide’s chief economist. “April marks the fifth month in a row in which annual house price growth has been below 1 percent.”
The lack of clarity over Brexit weighed on manufacturers last month too, as firms dialed back Brexit-related stockpiling and new export business fell. IHS Markit’s Purchasing Managers Index for the sector dropped from a 13-month high as production growth also slowed and job losses in the industry mounted.
To contact the reporters on this story: David Goodman in London at dgoodman28@bloomberg.net;Lucy Meakin in London at lmeakin1@bloomberg.net
To contact the editors responsible for this story: Fergal O'Brien at fobrien@bloomberg.net, Brian Swint
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