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Brexit bounce sees UK house prices grow at fastest rate since 2018

By Amanda Cooper

Nationwide index puts rise at better-than-expected 1.9 per cent after 12 months of stagnation

UK house prices accelerated in January at their fastest pace since late 2018, ahead of the country’s exit from the European Union at the end of the month, according to monthly data from mortgage lender Nationwide.

The Nationwide House Price Index rose by 1.9 per cent in January, following December’s 1.4 percent increase. This was the strongest yearly gain since November 2018 and followed 12 successive months in which annual price growth had faltered below 1 per cent, Nationwide said.

The figure beat analysts' expectations of a 1.5 per cent increase.

Robert Gardner, Nationwide chief economist said: “The underlying pace of housing market activity has remained broadly stable, with the number of mortgages approved for house purchase continuing within the fairly narrow range prevailing over the past two years.

“Healthy labour market conditions and low borrowing costs appear to be offsetting the drag from the uncertain economic outlook.”

Economic data has painted a mixed picture in the past few months, Gardner added. GDP growth appeared to grind to a halt at the end of 2019, although business surveys suggested a pickup at the start of this month.

But the economy added more than 200,000 jobs in the three months to November, the largest such gain since the end of 2018, Nationwide said. Economic developments will remain the key driver of the housing market, Gardner said.

Britain is scheduled to leave the EU on January 31. According to a report in the Guardian newspaper, negotiations over the UK’s future relationship with the bloc will begin on March 3.

“Much will continue to depend on how quickly uncertainty about the UK’s future trading relationships lifts, as well as the outlook for global growth,” Gardener said. “Overall, we expect the economy to continue to expand at a modest pace in 2020, with house prices remaining broadly flat over the next 12 months.”

FURTHER READING: Quarter of landlords planning to quit UK market this year

FURTHER READING: UK mortgage approvals at their highest since 2009

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