The Nationwide housing survey released earlier today indicated that house prices in the UK rose 0.3% in July on a monthly basis, however, the annualised print came in at 0.3%, a six-month low that has investors worried leading to a selloff in most home building companies.
Taylor Wimpey Plc (LON:TW) fell 6.0% following the survey’s release to trade at 165.95p contributing significantly to the 55 point drop in the FTSE 100 index earlier today as the footsie fell to trade at 7,592.
Howard Archer, the chief economic advisor to the Ernst & Young ITEM Club clarified that: “It is worth noting that there have been appreciable differences in house price performances across the regions with the overall national performance dragged down by London and the South East.”
He attributed the weakness being seen in the housing market to the 31st October Brexit deadline, which has created uncertainty among consumers as it is unclear what will happen in the case of a no-deal Brexit.
Archer also said that current house prices are expensive as compared to most homebuyers’ income. Therefore, some potential buyers are waiting for possible lower prices in future before buying a house.