UK house prices drop on ‘fading’ Brexit spending

British house prices fell for a third consecutive month in May for the first time since 2009, according to a survey, that underlines the housing market’s slowdown since last year’s Brexit vote.

House prices fell 0.2% month-on-month in May, compared with a 0.4% drop in April, mortgage lender Nationwide said.

Year-on-year, house prices were up 2.1%, marking the weakest annual growth since June 2013 and slowing from growth of 2.6% in April.

With the UK just a week away from a general election, the figures added to signs that they are reining back spending in the face of higher inflation fuelled by rising energy costs and the weakened pound since the vote for Brexit.

“It is still early days, but [the survey] provides further evidence that the housing market is losing momentum,” said Robert Gardner, Nationwide chief economist. “Moreover, this may be indicative of a wider slowdown in the household sector, though data continues to send mixed signals in this regard.”

Investec economist Victoria Clarke said the Nationwide figures were consistent with fading household spending power, with retail sales also weakening this year in spite of robust consumer confidence.

“Our suspicion is that the housing market will continue to remain subdued,” Ms Clarke said.

Meanwhile, investors who bought apartments on the south bank of London’s River Thames hoping to flip them for a quick profit face falling values and declining premiums for new homes. An oversupply of new properties in districts stretching from Tower Bridge to Battersea Bridge produced some of the city’s biggest annual price declines in March.

Reuters and Bloomberg


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