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House price growth slumps to five-year low

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Subdued demand and ongoing economic uncertainty have had an impact on house prices
House price growth slumps to five-year low

House prices were flat in October, according to Nationwide, pulling back annual property price growth to just 1.6%, it’s lowest level since May 2013.

The average UK property price is now £214,534.

Robert Gardner, Nationwide’s chief economist, said that the slowdown was ‘broadly in line with expectations, as the squeeze on household budgets and the uncertain economic outlook is likely to have dampened demand, even though borrowing costs remain low by historic standards and unemployment is at 40-year lows.”

And while he expects house prices to rise by 1% over the year as a whole, he admitted, ‘looking further ahead, much will depend on how broader economic conditions evolve’.

Brexit fears

Ross Boyd, founder of mortgage platform, Dashly, agreed buyers are worried about committing to a purchase amid such uncertainty. He said: “As we enter the business end of Brexit, households are getting ever more apprehensive and this is now materially affecting demand.

“After the brutal tax changes of recent years, the nightmare for landlords is proving particularly protracted.

“It’s hard to see the property market emerging from its current stasis until well into 2019 once there is more clarity on where the economy is at.”

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