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Rate of house price growth drops in October

Annual house price growth in the UK was down to 1.5% in the three months to October from 2.5% in September, Halifax’s latest House Price Index reveals.

That’s the lowest annual rate of growth since March 2013, but on a monthly basis their figures showed the market shaking off two consecutive falls to post a rise of 0.7%. It mirrors recent findings from the Nationwide, who had the rate to growth in October falling to 1.6% from 2%.

The Halifax index reports that the average house price now stands at £227,869, with the lender’s Managing Director Russell Galley commenting, “House prices continue to be supported by the fact that the supply of new homes and existing properties available for sale remains low.

“Further house price support comes from an already high and improving employment rate and historically low mortgage rates which are creating higher rates of relative affordability. We see this continuing to be the case over the coming months and we remain supportive of our 0-3% forecast range.”

Looking beyond the national figures

Other recent surveys show regional variations beyond the headline-grabbing national statistics. Hometrack’s figures had Liverpool leading the country in house price rises with a rate of 6.9%, with Manchester and Birmingham also faring well.

Emoov’s Russell Quirk said the Halifax figures show the UK market ending 2018 “not with a bang, but with a whimper”, but the online estate agent’s CEO added that there was reason for cautious optimism.

“This no reason to run for the hills having been widely predicted, with house prices at least, still up annually and both quarterly and monthly. A further freeze in interest rates should help stimulate the market through the volatile cocktail of mortgage affordability and lack of housing stock.

“Although this will help the Government keep homeowning voters on the side through artificially inflated house price growth in the short term, it simply isn’t sustainable in the long term. A continued failure to address the UK housing crisis, which seems inevitable after the less than satisfactory Autumn Budget last week, could have grave consequences.”

Jonathan Samuels, chief executive of property lender Octane Capital, could see why prospective buyers are sitting tight:

“We’re at that point in the cycle where there are considerably more reasons to sit tight than start scanning property websites. The monthly uptick rings hollow when juxtaposed alongside the annual growth rate, the lowest since 2013.

“The strong jobs market and continued low borrowing rates mean transactions are still taking place, but overall home sales are pancake flat. There’s very little stock on the market and the lack of choice, for many people, means the incentive to buy simply isn’t there. Moving home is a major financial commitment and right now the headwinds of Brexit are causing many people to batten down the hatches.”

The post Rate of house price growth drops in October appeared first on BuyAssociation.

Source: BuyAssociation

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