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November fall drags house price growth down to six-year low

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  • 07/12/2018
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November fall drags house price growth down to six-year low
House prices are rising at their slowest rate since December 2012 as the recent rocky performance continued in November.

 

The average cost of a home in November was £224,578, down from £227,694 in October and £226,247 in November 2017 respectively.

November’s 1.4% month-on-month fall was the third drop in prices in the last four months and means six out of the last twelve months have witnessed falls.

It means prices in the three months to November were just 0.3% higher than in the same three months last year.

That figure was a significant slowdown from the 1.5% growth recorded in October and was the lowest rate of growth since December 2012.

The November fall was also reflected in the latest quarter of September to November, where prices were 1.1% lower than in the preceding three months of June to August.

 

Within expectations

Halifax managing director Russell Galley was not too concerned about the figures.

“While this is the lowest rate of growth in six years, it remains within our forecast range of 0% to 3% for 2018,” he said.

“High employment, wage growth and historically low mortgage rates continue to make home ownership more affordable for many, though the need to raise a significant deposit still acts as something of a restraint on the market.

“This is largely offset by relatively limited supply of new and existing properties for sale, which continues to sustain house prices nationally,” he added.

This was echoed by a former RICS residential chairman Jeremy Leaf who noted the figures came on the back of recent encouraging housing transaction and mortgage approvals.

“However, they do continue the trend from last month of a softening, not correcting, market,” he said.

“Looking forward, we don’t expect activity to change much bearing in mind seasonal and political distractions.

“On the ground, lethargy is replacing energy as the market seeks direction in the early new year.”

 

Repeat of 2009

However, fears were raised that the figures could be more foreboding and that uncertainty around Brexit was dragging the market down significantly.

Octane Capital CEO Jonathan Samuels said: “Without wanting to appear overly pessimistic, there’s every chance 2019 could be 2009 all over again.

“People need to be preparing for that eventuality and the low level of transactions suggests they are. All the ingredients for extreme uncertainty, both political and economic, are in the mix.

“Mortgages are still cheap and the employment market strong, but the great unknown of Brexit is causing prospective buyers and sellers alike to err on the side of caution,” he added.

 

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