Brexit dampens UK house prices, biz confidence

LONDON • Brexit continues to take a toll on the UK, with new figures yesterday showing a fall in business confidence and continued weakness in the property market.

House price growth remained tepid in February, with values rising just 0.4% from a year earlier, according to Nationwide Building Society.

A separate report from Lloyds showed optimism among firms at a seven-year low, while GfK SE said consumer confidence is still close to the weakest since 2013.

The figures underscore the stress being felt by companies and households as Britain confronts the possibility of leaving the European Union without a settled plan for future ties with its biggest trading partner.

Nationwide said house prices edged lower compared to the month earlier, while the annual rate of growth, though better than the 0.1% figure in January, remained far below the pace recorded in 2018.

A shortage of homes, record employment and low interest rates are preventing a sharp downturn in prices.

“Indicators of housing market activity, such as the number of property transactions and the number of mortgages approved for house purchase, have remained broadly stable in recent months, but survey data suggests that sentiment has softened,” said Robert Gardner, Nationwide’s chief economist.

Financial results this week highlighted the nation’s increasingly divided housing market, with resilience outside the capital contrasting with London’s sluggishness.

Bovis Homes Group plc, which operates across the UK, reported record profits yesterday, while London-focused Telford Homes plc warned of a drop in profit and broker Foxtons Group plc reported a pretax loss.

GfK’s consumer-confidence index remained deep in negative territory this month, at levels last witnessed during the sovereign-debt crisis.

“The continuing depressed sentiment towards the general economic situation might point towards the calm before the storm of post-Brexit headwinds and potential negative economic outcomes,” said Joe Staton, client strategy director at GfK. “It is frankly amazing that confidence is so stoic and stable in a world of sharp political instability and fear of the unknown.” — Bloomberg