UK house prices fall again in April as buyers face Brexit pinch
British house prices fell for a second month in a row in April, suggesting households are feeling the pinch from rising inflation since last year’s Brexit vote and low wage growth, data from mortgage lender Nationwide showed on Friday.
Nationwide said house prices declined by a monthly 0.4 percent following a fall of 0.3 percent in March which had been the first drop since mid-2015.
In annual terms, prices were 2.6 percent higher, the weakest increase in almost four years.
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Economists polled by Reuters had expected house prices to rise by 0.1 percent in April from March and by 3.3 percent in annual terms.
Britain’s households are facing a loss of spending power due to rising inflation – aggravated by the fall in the pound since last year’s referendum decision to leave the European Union – which is starting to outpace wage growth.
A survey published earlier on Friday showed British consumers were their most gloomy in four months in April as they weighed up the outlook for the economy and their finances ahead of Brexit and June’s general election.
The last time Nationwide reported two consecutive months of house price falls in monthly terms was in mid-2012.
“While monthly figures can be volatile, the recent softening in price growth may be a further indication that households are starting to react to the emerging squeeze on real incomes or to affordability pressures in key parts of the country,” Nationwide economist Robert Gardner said.
The slowdown in the housing market might also reflect the strong pace of price increases with a typical home now costing 6.1 times average earnings, close to an all-time high of 6.4 times in 2007, before the financial crisis, Gardner said.
However, low levels of building and a shortage of properties on the market would provide some support for prices.
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“We continue to believe that a small increase in house prices of around 2 percent is likely over the course of 2017 as a whole,” Gardner said.
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