The latest House Price Index published by the Office for National Statistics (ONS), showed that house prices rose by 7.7% in the year to September, with the average property setting a buyer back £218,000. Annual growth has remained unchanged since August.
Confidence in the construction and sales sectors have plummeted in recent months, according to official statistics. In its market survey for September, the Royal Institution of Chartered Surveyors reported that new sales listings fell in August, a continuation of the trend seen over the past seven months. The latest ONS Output in the Construction Industry report also showed that new-build housing output fell by 1.3% in August, although new-build housing output remains 8.0% higher compared with August 2015.
In September, properties in the east of England recorded the highest yearly growth as prices surged by 12.1% to reach an average of £277,000. Meanwhile, London house prices experienced the second highest rate of growth at 10.9%, while the North East suffered the biggest fall as prices dropped by 1.5% to £125,000.
The average price paid in September by a first-time buyer in Great Britain was £183,385, which is unchanged from August but up 7.5% on last year. Homemovers paid £253,086, 0.3% higher than August and 7.9% higher than a year earlier.
Despite sluggish growth, John Eastgate, sales and marketing director of OneSavings Bank, was optimistic, adding that political uncertainty must not stand in the way of policymakers addressing “underlying structural issues” in the housing market.
“Buyer demand has rebounded following political uncertainty over the summer to rise for a second consecutive month in October. In contrast, estate agents are reporting fewer available properties on their books, a symptom of the chronic under supply facing the UK housing market. This will push up prices in the longer-term, hampering affordability, at a time when real term incomes may begin to fall.”
Eastgate added that while “a silver bullet” at the Autumn Statement was unlikely, the industry was still hopeful that Chancellor Philip Hammond would announce measures to improve affordability and encourage construction.
“An £18m fund announced last week to accelerate planning permissions in England is one such measure, but this alone is but a drop in the ocean if we are hit the 300,000 new homes per year that the UK will need,” he said.
John Goodall, CEO and co-founder Landbay, agreed: “The buy-to-let market has become a lifeline for Generation Rent, and is growing healthily to meet this demand, but we need an ironclad commitment on house building from policy makers. All eyes then will be on next week’s Autumn Statement to see how the Chancellor plans to address the issue.”