LONDON (Reuters) – British house price growth picked up slightly this month from October’s five-year low, but the future outlook remains depressed by an uncertain economy and a squeeze on household budgets, major mortgage lender Nationwide said on Friday.
Annual house price growth rose to 1.9 percent in November from 1.6 percent in October, a bigger pick-up than the average forecast in a Reuters poll of economists, while monthly growth was also stronger than expected at 0.3 percent.
“In the near term, the squeeze on household budgets and the uncertain economic outlook is likely to continue to dampen demand, even though borrowing costs remain low and the unemployment rate is near 40-year lows,” Nationwide chief economist Robert Gardner said.
Figures on Thursday showed that consumer confidence sank to its lowest level in almost a year, with households concerned about the outlook for the economy as Prime Minister Theresa May faces an uphill battle to get her preferred Brexit deal passed by parliament on Dec. 11.
Without a deal, Britain risks a disorderly departure from the EU next March — something which in a worst-case scenario could lead to a 30 percent fall in house prices, Bank of England Governor Mark Carney warned the public this week.
However, BoE data for October had shown an increase in the number of mortgages approved for house purchase, and Nationwide said that if uncertainty lifted, it expected housing market activity to strengthen in 2019.