Property prices across the UK rose modestly in January to mark a good start to the year, but there are warnings that moving forward, price rises could be dampened by the arrival of Brexit, with Article 50 set to be triggered in coming months.
The latest data released by Nationwide shows that in January, prices rose by 0.2 per cent when compared to December, with the average price of a home now sitting at a little over £205,000. When compared to the same month last year, the market has shown significant growth as well, with a 4.3 per cent rise in comparison with January 2016.
However, despite the steady growth seen in the last 12 months, and the fact that the market has so far not reacted badly to the Brexit vote, with the looming exit from the EU getting nearer, Nationwide said the outlook for the sector in the year ahead is not clear.
Robert Gardner, Nationwide’s chief economist, said: "Recent data indicates that the economy didn’t slow in the second half of 2016 and the unemployment rate remained stable at an 11 year low in the three months to November. However, there are tentative signs that conditions may be about to soften."
While sentiment and the economy did not suffer in the wake of the Brexit vote, it's the looming reality that it's about to happen that could reawaken uncertainty and cause prices to stall, although the market may well have enough to see it through this time.
"On balance, we agree with the consensus view that the economy is likely to slow through 2017 as the squeeze on household budgets intensifies and heightened uncertainty weighs on business investment and hiring," said Mr Gardner.
He also went on to say that over the coming months, inflation should rise again, which would put a squeeze on household finance and mean people paying less on homes than they have done in recent times.