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UK property market flat in August, latest lender index shows

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There was little change in UK house prices in August, up just 0.6% year on year and flat month on month, according to the latest lender index.

This took the average price of a house in the UK to 216,096, with annual house price growth below 1% for the ninth month in a row, the data from lender the Nationwide shows.

‘While house price growth has remained fairly stable, there have been mixed signals from the property market in recent months,’ said Robert Gardner, chief economist of the Nationwide.

‘Housing market trends will remain heavily dependent on developments in the broader economy. 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,’ he pointed out.

He explained that new buyer enquiries have increased a little, although 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,’ he added.

According to Shepherd Ncube, chief executive officer of Springbok Properties, anything short of a market collapse could be viewed as positive given the current economic and political sentiment.

‘We’ve seen the market survive on bits of positive buyer sentiment, mortgage affordability, and fairly positive wage growth for quite some time now, but in the long term this simply isn’t enough to sustain momentum,’ he said.

Marc von Grundherr, director of Benham and Reeves, believes that the market is likely to see a turbulent few months. ‘While we would usually see heightened market activity remain right through until December, Brexit uncertainty that grows bigger by the day will deter many from selling this side of Christmas,’ he said.

‘This is only to be expected and when coupled with the market slowdown that generally comes due to impending seasonality, it may seem drastic,’ he commented, but added that once Brexit is over the market will get a boost.