UK housing market subdued as Brexit hits confidence – business live | Business
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For most of us, a house is the biggest purchase we’ll ever make — if we get the chance at all. And today we have fresh evidence that Brexit uncertainty is weighing the market down.
House prices were flat in August, the Nationwide building society reports this morning, extending a long run of weak growth.
On an annual basis, prices were just 0.6% higher than a year ago – lagging behind wages, and the broader inflation measure.
The average UK house now costs £216,096, Nationwide reports, down from £217,663 (this is not seasonally adjusted, though).
It’s rare good news for those trying to get onto the housing ladder, but also a sign that economic confidence remains subdued — with Britain possibly crashing out of the EU without a deal in two months time.
Robert Gardner, Nationwide’s Chief Economist, explains that that market looks subdued – and affected by “developments in the broader economy”(<cough> Brexit).
“Annual house price growth remained below 1% for the ninth month in a row in August, at 0.6%. While house price growth has remained fairly stable, there have been mixed signals from the property market in recent months.
“Surveyors report that new buyer enquiries have increased a little, though key consumer confidence indicators remain subdued. Data on the number of property transactions points to a slowdown in activity, though the number of mortgages approved for house purchase has remained broadly stable.
In the near term, healthy labour market conditions and low borrowing costs will provide underlying support, though uncertainty is likely to continue to exert a drag on sentiment and activity.
This report comes as UK firms warn that confidence is being damaged by the ongoing Brexit crisis.
Yesterday technology firm Micro Focus and recruitment company Hays both warned that investment is being held back and new recruitment plans frozen, as firms fear a disorderly Brexit.
Also coming up today
August has been a volatile time for the stock market, as fears of a global downturn hit shares. But markets are making a late recovery today, on hopes (once again….) of progress in the US-China trade war.
President Donald Trump stoked optimism yesterday, revealing that talks were taking place “at a different level”, adding:
“Let’s see what the end product is; that’s what you have to judge it by.”
This lifted stocks in New York, where the Dow Jones industrial average jumped by 326 points, or 1.25%.
European stock markets are expected to nudge higher today.
New eurozone inflation data could move the euro later, as a weak reading would put more pressure on the European Central Bank to ease monetary policy.
- 9.30am BST: Bank of England’s latest mortgage approvals and consumer credit figures
- 10am BST: Eurozone inflation data for August
- 1.30pm BST: Canadian GDP for Q2