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UK house prices stay sluggish as Brexit drags on market: Nationwide

[LONDON] British house prices remained stuck in low gear in July and uncertainty about Brexit and its impact on the economy are likely to carry on dragging on the market, mortgage lender Nationwide said on Wednesday.

House prices increased by 0.3 per cent compared with a year earlier after rising by 0.5 per cent in June, a level of growth that has only been weaker once since early 2013. A Reuters poll of economists had pointed to a 0.1 per cent rise in July.

In monthly terms, house prices also rose by 0.3 per cent, a touch stronger than the median forecast in the poll for a rise of 0.2 per cent and up from 0.1 per cent in June.

Nationwide chief economist Robert Gardner said uncertainty was weighing on the housing market which has slowed since the 2016 decision by voters to leave the European Union (EU).

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More than three years later, Britain has yet to leave the EU and many investors are worried about the possibility of a departure without the cushion of a transition deal on Oct 31, the latest deadline for Brexit.

"In the near term, healthy labour market conditions and low borrowing costs will provide underlying support, though uncertainty is likely to continue to exert a drag on sentiment and activity," Mr Gardner said in a statement.

Nationwide has reported annual price growth of less than 1 per cent for eight months in a row, compared with about 5 per cent at the time of the 2016 Brexit referendum.

However, the relatively stable pattern in the lender's figures this year echoes other indicators which suggest that a weakening of the housing market in 2018 might have bottomed out.

Bank of England figures published on Monday showed a stronger-than-expected rise in mortgage approvals.

A survey published earlier on Wednesday showed consumers remained relatively upbeat. 

REUTERS