House prices are growing at their weakest pace since February 2013, rising by just 0.5pc in December compared to a year ago.
The figure marks a noticeable slowdown from previous months, when prices had been rising at around 2pc. Nationwide, which published the figures, said that it was “broadly in line with [its] expectations” of prices rising by 1pc in 2018.
The lender said the uncertain economic outlook was undermining consumer confidence in the market, “given that it has occurred against a backdrop of solid employment growth, stronger wage growth and continued low borrowing costs”.
While the market experiences a season slowdown in December, Nationwide said measures of consumer confidence weakened last month and the number of properties coming onto the market also slowed.
Robert Gardner, Nationwide’s chief economist, said the market’s prospects would be heavily dependent on how quickly 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”.
If the economy continues to grow at a modest pace, Nationwide expects UK house prices to rise “at a low single-digit pace in 2019”.