UK house prices fell by 0.7 per cent in December, as prices’ annual growth rate dropped to its lowest level in almost six years.
Prices grew by just 0.5 per cent year on year, compared to 2.6 per cent growth in 2017, but fell compared to November.
London recorded a 0.8 per cent decline in house prices for the last month of 2018, according to Nationwide figures released today, leaving the average house price at £466,988.
The Outer Metropolitan area fell by 1.4 per cent to see house prices fall to £356,531.
Across the UK, the average house price stood at £212,281 in December, down from £214,044 in November.
Robert Gardner, Nationwide's chief economist, said the latest figures were evidence of a “noticeable slowdown” towards the end of the year, but were in line with expectations after consumer confidence fell in December.
“The economic outlook is unusually uncertain,” he added, blaming the slowdown on Brexit uncertainty given wage growth and employment are both strong.
“Near term prospects will be heavily dependent on how quickly this uncertainty lifts, but ultimately the outlook for the housing market and house prices will be determined by the performance of the wider economy – especially the labour market,” he said.
But 2019 may experience a growth in house prices if Brexit comes to pass without impacting the unemployment rate or borrowing costs, Gardiner predicted.
“We would expect UK house prices to rise at a low single-digit pace in 2019,” he said.
Lucy Pendleton, founder director of independent estate agent James Pendleton, said that Brexit uncertainty has delivered "a lost year".
“House prices soldiered on throughout 2018 and then threw their arms up and crawled over the line with just yards to go," she added.
"Forward guidance from the Bank of England has been at a historical high but Brexit is the spook that just won’t allow confidence to rise to more than a slow walk.
“A slew of buyer incentives has still resulted in a market at a virtual standstill. This is going to put incredible pressure on those in power to keep greasing the wheels with stamp duty reliefs and Help to Buy even though many believe they are counterproductive and slightly dangerous ways of fanning the flames of house price growth in the long term.”
Jonathan Samuels, chief executive of property lender Octane Capital, added: “Brexit has smashed property market sentiment to smithereens.
“For countless prospective buyers, Brexit has put everything on hold.
“Borrowing rates may be low and the jobs market strong, but a deep undercurrent of uncertainty is causing the vast majority of people to sit on their hands.
“A low single digit pace in growth is probably the best we can hope for in 2019. In fact, growth of any kind will be a victory.”