The lender reports that annual price declines persist in London and the Outer South East with deposit issues remaining a key challenge for prospective first time buyers.
Robert Gardner, Nationwide's Chief Economist, said: “Annual UK house price growth edged up as 2019 drew to a close, with prices 1.4% higher than December 2018, the first time it been above 1% for 12 months.
Indicators of UK economic activity were fairly volatile for much of 2019, but the underlying pace of growth appeared to slow through the year as a result of weaker global growth and an intensification of Brexit uncertainty.
The underlying pace of housing market activity 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 have offset the drag from the uncertain economic outlook.
Looking ahead, economic developments will remain the key driver of housing market trends and house prices. 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. Overall, we expect the economy to continue to expand at a modest pace in 2020, with house prices remaining broadly flat over the next twelve months."
Tomer Aboody, director of property lender MT Finance, says: "Annual house price growth in December is in line with the rest of the year, underlining uncertainty and lack of confidence in the market. Much of this was down to Brexit wrangling and the lack of government majority which made it impossible to get anything done. With the general election resolving the latter, December showed a slight strengthening in the housing market which we expect to continue in the forthcoming year.
Unfortunately, it's still taking buyers many years to raise the necessary deposit. We hope that with government assistance, pricing stagnation and continued cheap mortgage rates, this can be reduced. We look forward to a stronger 2020, where buyer confidence should be higher and further increases in prices, even if only marginal, will be seen."
Mark Harris, chief executive of mortgage broker SPF Private Clients, says: "Nationwide reports that the housing market held up remarkably well in 2019, assisted by strong employment, low mortgage rates and a lack of supply, which supported prices even in the face of considerable economic and political uncertainty.
First-time buyers were the big success story of the year, steadily growing in number. Lenders are doing their bit, offering higher loan-to-values at competitive rates and more innovative products which enable the Bank of Mum and Dad to offer assistance. Being able to afford a mortgage in London remains the biggest challenge, despite the softening of prices there, while outside of the capital it is the deposit which continues to be the issue."
Jeremy Leaf, north London estate agent and a former RICS residential chairman, says: "The latest Nationwide figures confirm what we are seeing at the sharp end - that buyers and sellers are shrugging off continuing concerns about Brexit and taking advantage of improved affordability while negotiating hard so price rises remains modest.
This determination has been evidenced by the number of sales and lettings beginning to be negotiated between Christmas and New Year, with the number of market appraisals we have seen higher than the same time last year.
Values have been underpinned for some time by a shortage of stock but we don’t expect a sharp increase as upward pressure will be balanced out by more supply and broader concerns about the economy. Higher rises can be expected in areas where the ratio of house prices to earnings is low."
