UK house prices grew at less than one per cent for the ninth month in a row in August, Nationwide figures revealed today, prompting calls for Boris Johnson to slash stamp duty.
The value of homes did not grow between July and August, Nationwide’s House Price Index found.
But they did grow 0.6 per cent on an annual basis and 0.3 per cent over the last three months.
However, UK house prices slipped to an average price of £216,096 in August, down from July’s £217,663.
Nationwide warned that Brexit uncertainty is weighing the market down despite healthy economic signals.
“While house price growth has remained fairly stable, there have been mixed signals from the property market in recent months,” Robert Gardner, Nationwide’s chief economist, said.
No-deal Brexit threat weighs down UK house prices
While mortgage approvals have been stable and new buyer enquiries have improved, UK consumer confidence slumped in August as a no-deal Brexit looms.
The threat of Brexit uncertainty will continue to cloud the UK housing market, Gardner added.
“Housing market trends will remain heavily dependent on developments in the broader economy,” he said.
“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.”
Howard Archer, chief economic adviser to the EY Item Club, added: “With the economy struggling and the outlook currently highly uncertain, we suspect that house prices will remain soft despite the recent pick-up in housing market activity – which could well prove temporary.”
Could Boris Johnson cut stamp duty?
Prime Minister Boris Johnson is yet to announce his domestic agenda since he took power in July, but he is reportedly considering slashing stamp duty to boost UK house prices.
This couldn’t come soon enough, according to experts, who believe it would help lift housing stock supply and boost house price value as Johnson takes the UK closer to a no-deal Brexit.
Guy Harrington, chief executive of property lender Glenhawk, said: “The need for more stock is as urgent as ever and the government would be foolish not to address stamp duty relief as a priority.”
Archer added: “Housing market activity – and possibly to a lesser extent prices – could be given a lift in 2020 if the government cuts stamp duty significantly in the Budget later this year.”
Kevin Roberts, director of the Legal & General Mortgage Club, added: “The critical issue is that there are simply not enough homes to meet the demand from consumers, whether people buying their first property or those who want to downsize.”
By Joe Curtis
Source: City AM