House prices were flat in October, as the housing market struggled to regain the momentum it lost following the EU referendum.
According to data from Nationwide, there was no house price growth month-on-month in October. House prices increased 4.6 per cent year-on-year, down from an annual growth of 5.3 per cent in September.
Nationwide's chief economist Robert Gardiner said that house price growth - which has averaged five per cent over the past eighteen months - is still far outpacing wage growth, however. The difficulties for first time buyers have been mitigated somewhat by the falling cost of borrowing, but buying a home still remains beyond the reach of many, especially in London.
The number of property transaction in October was down by 10 per cent on the same month last year, Nationwide said. JLL said yesterday that the stagnant housing market won't recover until 2020.
Howard Archer, chief UK economist at IHS Markit, said: "October’s flat house prices reported by the Nationwide comes amid signs that housing market activity has recently come modestly off its lows after softening through much of the year.
"With housing market activity seemingly coming modestly off its recent lows and the economy currently resilient, house prices may well edge a little higher in the near term.
"However, we suspect that house prices will come under increasing pressure as 2017 progresses and may dip modestly over the year, possibly by around three per cent."
However, any drop in house prices will be cushioned by the severe housing shortage in the UK, Archer said. Many pundits have also forecast a slowdown in construction.
The recent fall in sterling has raised the prospect that international buyers will rush to London to take advantage of the relatively low prices, and prop up the upper end of the market.