House prices from September to November increased by 0.2% on a monthly basis and by 0.8% quarter-on-quarter, taking the average property price up to £218,002.
These positive figures belie a longer-term downward trend, following a peak for annual house price growth of 10% in March, and quarterly growth of 3% in February.
Halifax housing economist Martin Ellis explained: “Despite November’s pick-up, heightened affordability pressures, resulting from a sustained period of house price growth in excess of earnings rises, appear to have dampened housing demand, contributing to the slowdown in house price inflation. Very low mortgage rates and an ongoing, and acute, shortage of properties available for sale should help support price levels although annual house price growth may slow over the coming months.”
Recent data from the Bank of England showed that the volume of mortgage approvals for house purchase remained stagnant in the three months to October – unchanged from the preceding three months. Meanwhile, availability of homes for sale fell in October, taking stock to its lowest ever recorded level.
Further findings published by Halifax showed that confidence in the UK housing market has now fallen to its lowest point in three years. However, the majority of respondents expect the average UK price to be higher in a year’s time, compared with 15% who expect a lower average price.
Ian Thomas, co-founder and director LendInvest, said the government had “missed an opportunity” to boost confidence in the housing market by rethinking its approach to taxation of the buy-to-let market during the Autumn Statement.
“While the property market has proven resilient over recent months, underpinned by a continued demand for homes of all types, growth in the coming months is likely to be limited by a lack of buyer affordability and uncertainty around the outcome of Brexit negotiations,” he said.
“As house price growth slows, the UK faces a hard task in addressing the chronic shortage of housing. In the Autumn Statement the Treasury missed an opportunity to improve confidence in the market by revising Stamp Duty changes brought in earlier this year. Looking forward, government should consider measures of this kind to improve the supply of new homes and confidence in the market.”