You are here: Home - News -

Annual house price growth drops to lowest level since August 2013

by: Adam Lewis
  • 07/10/2016
  • 0
Annual house price growth in the UK slipped to 5.8% in the three months to September, down from 6.9% in August according to the Halifax Price Index.

This is the lowest yearly growth rate since the 5.4% recorded in August 2013 and the continuation of a six month decline, when at its peak in March this year the annual rate of growth stood at 10%.

Meanwhile prices in the last three months (July-September) were 0.1% lower than the previous three months (April-June). This compares with a 0.7% rise in August and is the lowest quarterly rate since November 2012 (-0.3%). The average price of a UK home now stands at £214,024.

“The housing market has followed a steady downward trend over the past six months with clear evidence of both a softening in activity levels and an easing in house price inflation,” said Martin Ellis, Halifax housing economist.

He added that the reduction in annual house price growth remains in line with its forecast that it made at the end of last year.

“A lengthy period where house prices have risen more rapidly than earnings has put pressure on affordability, therefore constraining demand,” he said. “Very low mortgage rates and a shortage of properties available for sale should, however, help support price levels over the coming months.”

In response to the figures, Ian Thomas, co-founder and director of online mortgage lender LendInvest, said: “Recent months have seen a number of external factors chipping away at demand, such as Brexit, the additional Stamp Duty charge on second homes and the traditionally slow summer.

“The confirmation that the Help to Buy scheme will end later this year is another one. The initiative has been extremely popular, so it will be interesting to see if its conclusion will drive down demand and therefore sales of new build properties.”

He added that while it is good the government made house building part of their party conference over the last week “the time for talking about the housing shortage must end – we need action, not words”.

Indeed while the price easing has so far been smooth, Nicholas Finn, executive director of Garrington Property Finders, warned there could be “potholes ahead”.

“The housing market has successfully performed a soft landing – and the runway has so far been smooth,” he said.

“At present prices are being supported by the combination of resilient consumer confidence and a chronic shortage of homes for sale.

“With many potential sellers battening down the hatches and opting to delay putting their homes on the market, the mismatch between demand and supply will prevent any sudden drops in price.”

There are 0 Comment(s)

Comments are closed.

You may also be interested in