UK house price growth has climbed for the third month in a row, according to the latest figures from Halifax.
The lender’s newest house price index shows that house prices in the three months to October were 4.5 per cent higher than the same period in 2016, up from September’s rate 4 per cent and the highest growth rate recorded since February 2017.
Russell Galley, Managing Director, Halifax Community Bank, says: “The annual rate of growth has continued to rise for the third month in succession, rising from 4.0% in September to 4.5% in October. The average house price is now £225,826 – exceeding last month’s previous high. House prices in the three months to October were 2.3 per cent higher than in the previous quarter, the fastest quarterly increase since January.”
Monthly UK home sales continue to exceed 100,000, according to HMRC. Despite home sales recording a modest fall of 2 per cent to 100,850 in September they have remained just above 100,000 each month since January. In the three months to September, home sales were 6 per cent higher than in the same period a year earlier.
“The fact that the supply of new homes and existing properties available for sale remains low, combined with historically low mortgage rates and a high employment rate, continues to support house prices and is likely to do so over the coming months,” he adds.
Despite the recent rise in house prices, though, confidence in UK house prices has fallen to its lowest level since December 2012, according to the latest Halifax Housing Market Confidence Tracker. The survey, which tracks consumer sentiment on whether house prices will be higher or lower in a year’s time, has dropped 14 points from April 2017 to October, matching the record fall seen following the EU referendum result.
“Increasing pressure on household finances and continuing affordability concerns are some of the factors likely to dampen buyer demand. That said we do not anticipate the Base Rate rise will be a barrier to buying a house,” comments Galley.
UK house prices see best monthly rise of 2017
8th August 2017
UK house prices have recorded their biggest rise of 2017 this month, despite an overall cooling in price growth.
The average house price in July rose 0.4 per cent month-on-month to £219,266, the best monthly jump this year. There is some optimism to be drawn from that rise, although it arrives during a period of cooling growth: values fell 0.9 per cent in the previous month, while prices in the three months to July were 0.2 per cent lower than in the previous three months, the first time there have been four consecutive quarterly falls since November 2012.
The figures highlight how much the market has flattened in recent months: after exceeding 100,000 for five successive months, home sales fell 3 per cent between May and June, to 96,910, according to HMRC, the lowest level since October 2016.
Russell Galley, Managing Director, Halifax Community Bank, says: ““House prices continue to remain broadly flat, as they have since the start of the year. Prices in the three months to July were marginally lower than in the preceding three months, while the annual rate of growth has edged down from 5.7 per cent in January to 2.1 per cent in July; the lowest rate since April 2013.
Nonetheless, the imbalance between supply and demand continues to underpin property values.
“The rise in the employment level by 175,000 in the three months to May helped push the unemployment rate down to 4.5 per cent, the lowest since June 1975. However, this improvement in the jobs market has not, as yet, boosted wage growth, resulting in earnings rising at a slower rate than consumer prices,” adds Galley. “This squeeze on spending power, together with the impact on property transactions of the stamp duty changes in 2016 now being realised, along with affordability concerns, appear to have contributed to weaker housing demand.”
Even with lower demand, though, the lack of stock continues to be the biggest factor in the market’s performance: new instruction for home sales fell for the 16th consecutive month in June, according to the RICS, with average stock levels on estate agents’ books down marginally to an all-time low. As a result, price growth may weaken, but is unlikely to transform into actual price falls.
“As we move away from the previous period of political uncertainty that has plagued the property market of late, we should see a growing degree of stability return for UK homeowners,” says Founder and CEO of eMoov.co.uk, Russell Quirk.
“Although prices are still down on the previous quarter and price growth is likely to remain fairly subdued for the remainder of the year, they continue to be up on an annual basis and given the current seasonality an increase no matter how small is a good sign during the peak of the summer months.”
UK house prices see first quarterly decline in five years
8th May 2017
UK house prices have seen their first quarterly decline in almost five years, according to Halifax.
The lender’s latest house price index shows that property values in the three months to April 2017 were 0.2 per cent lower than the preceding quarter. House prices in the three months to April were 3.8 per cent higher than in the same period a year ago; the same as in March.
Martin Ellis, Halifax housing economist, says: “House prices have stagnated over the past three months. Overall, prices in the three months to April were marginally lower than in the preceding three months; the first quarterly decline since November 2012. The annual rate of growth remained at 3.8 per cent in April, the lowest rate since May 2013.
“Housing demand appears to have been curbed in recent months due to the deterioration in housing affordability caused by a sustained period of rapid house price growth during 2014-16,” he add . “Signs of a decline in the pace of job creation, and the beginnings of a squeeze on households’ finances as a result of increasing inflation, may also be constraining the demand for homes.”
Nonetheless, low mortgage rates and a shortfall in supply vs. demand is expected to underpin house prices over the coming year.
UK house price growth falls to four-year low
7th April 2017
House price growth in the UK is at its slowest in four years, according to Halifax.
The lender’s latest house price index shows that property values in the three months to March 2017 rose 3.8 per cent year-on-year, lower than the 5.1 per cent record in February and the slowest rate since May 2013.
Martin Ellis, Halifax housing economist, says: “House prices in the three months to March were 0.1 per cent higher than in the previous quarter; the lowest quarterly rate of change since October 2016. The annual rate of house price growth has more than halved over the past 12 months. A lengthy period of rapid house price growth has made it increasingly difficult for many to purchase a home as income growth has failed to keep up, which appears to have curbed housing demand.”
Nicholas Finn, executive director of Garrington Property Finders, comments: “What began as a soft landing has slowed to a gentle taxi off the runway. A year ago the property market was soaring, now it is stuck on terra firma – with annual price growth little over a third of what it was in March 2016… But against the uncertain economic backdrop, there is cause for some optimism as buyer intent remains strong in many parts of the UK.”
Indeed, buyers are now driving the market, as the supply of both of new homes and existing homes remains low. With historic mortgage rates being maintained by the government, demand is likely to continue, which will underpin price growth to some degree.
“We expect average prices to continue inching upwards, albeit at a subdued pace as house price to earnings ratios begin to bite in many parts of the country,” comments Ellis.
UK house price growth slows in February
10th March 2017
UK house price growth slowed in February 2017, according to Halifax.
The lender’s latest property price index shows that house prices in the three months to February were 1.7 per cent higher than in the previous quarter – down from 2.3 per cent in January. The annual rate of growth fell to 5.1 per cent from January’s 5.7 per cent, the lowest since July 2013.
“Housing demand is being supported by an economy that continues to perform well with employment still expanding,” says Martin Ellis, Halifax housing economist. “Meanwhile, the supply of both new homes and existing properties available for sale remains low. This combination is pushing up prices.
“The annual rate of house price growth has, however, nearly halved over the past 11 months. A sustained period of house price growth in excess of pay rises has made it increasingly difficult for many to purchase a home. This development, together with signs of reduced momentum in the jobs market and squeezed consumer spending power, is expected to curb house price growth during 2017.”
UK house prices dip for first time since summer
8th February 2017
UK house prices dipped for the first time since summer at the start of 2017.
The latest Halifax house price index shows that property prices fell 0.9 per cent month-on-month in January, the equivalent of £2,000, taking the average property value to £220,260. On a quarterly basis, though, house prices climbed 2.8 per cent in the three months to January compared to the previous quarter, and 5.7 per cent compared to the same three months a year ago. Even these, however, remain far below the 10 per cent annual growth recorded in March 2016, as the market cools down.
Nonetheless, the ongoing housing shortage is expected to underpin price growth, as stock falls short of demand.
Martin Ellis, Halifax housing economist, says: “The quarterly and annual rates of house price growth remain robust even though they are lower than in spring 2016. UK house prices continue to be supported by an ongoing shortage of property for sale, low levels of housebuilding, and exceptionally low interest rates.”
These factors are “unlikely to change materially during 2017”, adds Ellis, although he notes that weaker economic growth and increasing pressure on spending power, along with affordability constraints, are expected to dampen housing demand, resulting in “some downward pressure on annual house price growth”.
UK house prices see biggest rise since March
9th January 2017
UK house price growth reached its highest level since March in December 2016, according to Halifax’s latest index.
House prices jumped 1.7 per cent month-on-month to £222,484 at the end of last year, the highest monthly growth since March’s 2.2 per cent and the fourth month of increases in a row. The data marks a positive conclusion to a tumultuous year, with the market slowing down notably following the rush to beat the stamp duty surcharge deadline in April, exacerbated by the uncertainty surrounding the vote to leave the EU in June.
Indeed, house prices in the final three months of 2016 were 2.5 per cent higher than in the previous three months. This compared to the 0.9 per cent quarterly rate of change in November and, again, marked the highest quarterly rate of change since March 2016 (2.9 per cent).
Prices in the three months to December were also 6.5 per cent higher than in the same three months a year earlier. This was the second consecutive increase in the annual rate from a 2016 low of 5.2 per cent in October and a 6.2 per cent rise in November. Despite the increases in November and December, however, the annual rate remained significantly below the 10 per cent peak reached in March 2016.
Martin Ellis, Halifax housing economist, says: “House prices finished 2016 strongly.”
However, 2017’s outlook is notably more cautious.
“Slower economic growth, pressure on employment and a squeeze on spending power, together with affordability constraints, are expected to reduce housing demand during 2017,” says Ellis. “UK house prices should, however, continue to be supported by an ongoing shortage of property for sale, low levels of housebuilding, and exceptionally low interest rates. Overall, annual house price growth nationally is most likely expected to slow to 1-4 per cent by the end of 2017.”
Halifax’s relatively wide range for its forecast “reflects the higher than normal degree of uncertainty regarding the prospects for the UK economy”, adds Ellis. For more on what’s in store for the UK property market, see our round-up of forecasts for house prices in 2017.
House prices up again, but growth is slowing
7th December 2016
House prices rose again this November in the UK, although growth is slowing down.
Property values jumped by an average of 6 per cent in the three months to November, compared to the same period of 2015, while values edged up 0.8 per cent compared to the preceding quarter.
This marks the first increase in the annual rate of growth for eight months, up from 5.2 per cent growth in October 2016.
However, despite November’s pick-up, the annual rate has been on a steady downward trend in recent months, since reaching a peak of 10 per cent in March. Indeed, on a monthly basis values rose by just 0.2 per cent in November, taking the average house price to £218,000.
“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,” comments Martin Ellis, Halifax housing economist.
However, the fundamentals of the housing market, and the fundamental shortgage of supply, means that with demand remaining relatively high (fuelled by low mortgage rates), price growth is expected to continue being underpinned by the imbalance, albeit at a slower rate.
Ishaan Malhi, CEO and Founder of online mortgage broker Trussle, adds: “For first-time buyers and those looking to remortgage, now is the time to take advantage of favourable interest rates while they’re around. Locking in a good fixed term mortgage rate now could save thousands of pounds in the long run.”
UK house price growth slows to three-year low
7th November 2016
UK house price growth has slowed to its lowest rate in three years this autumn.
According to the Halifax, house prices rose 1.4 per cent in October from September, taking them to an average of £217,411. On a quarterly basis, property values edged up 0.1 per cent in the three months to October 2016, compared to the three months to July 2016. This is a slight improvement on last month’s rate of -0.1 per cent, but the quarterly rate of change has fallen from a peak of 3 per cent in February.
Prices in the three months to October were 5.2 per cent higher than in the same three months a year earlier. This is lower than the 5.8 per cent recorded in September and continues the deceleration trend seen over the past six months after the annual rate reached 10 per cent in March. Indeed, October’s 5.2 per cent is the lowest yearly growth rate since July 2013 (4.6 per cent).
Martin Ellis, Halifax housing economist, says: “Activity levels, like house price growth, have softened compared with a year ago. Home sales, however, appear to have stabilised in recent months following the distortions earlier in the year due to the changes to stamp duty in April. Annual house price growth has nearly halved
from a peak of 10.0% in March this year, but remains robust at 5.2 per cent. This expected slowdown appears to have been largely due to mounting affordability pressures, which have increasingly constrained housing demand. While house price growth may ease further in the coming months, very low mortgage rates and a shortage of properties available for sale should help support price levels.”
UK house price growth continues to slow
7th September 2016
Growth of UK house prices continues to slow, according to Halifax’s latest index.
The new report from the lender confirms the existing trend of market cooling in the wake of the UK’s EU referendum: the average UK house price is now £213,930, says Halifax, down 0.2 per cent month-on-month.
Prices on a quarterly basis, though, are more positive, with growth rising 0.7 per cent in the three months to August 2016, compared to the previous three months. On a year-on-year basis, values climbed 6.9 per cent, although this is down from the 8.4 per cent recorded in July.
“House price growth continued the trend of the past few months in August with a further moderation in both the annual and quarterly rates of increase,” comments Martin Ellis, Halifax housing economist. “There are also signs of a softening in sales activity.”
The slowdown in the rate of house price growth is consistent with the forecast that Halifax made at the end of 2015, with the lender citing affordability issues over Brexit concerns as one of the biggest weights on the market.
“Increasing difficulties in purchasing a home as house prices continued to increase more quickly than earnings were expected to constrain demand, curbing house price growth,” adds Ellis.
UK house price growth shows signs of slowing
5th August 2016
UK house price growth is showing signs of slowing, according to the latest figures from Halifax, although it is too soon to tell whether Brexit is a factor.
House prices dipped 1 per cent between June and July 2016 to an average of 214,678, offsetting the 1.2 per cent increase in June, but month-on-month changes are often volatile – indeed, this is the third monthly fall so far in 2016 – with the lender preferring to focus on quarterly changes to determine market trends.
In the three months to July 2016, house prices grew 8.4 per cent, compared to the same period in 2015, unchanged from the precious month, albeit the lowest since July 2015. House prices rose 1.6 per cent compared to the preceding three months (February to April 2016).
“There are signs that house price growth is slowing with a deceleration in both the annual and quarterly rates of increase in the past few months. Nonetheless, the current rates remain robust,” says Martin Ellis, Halifax housing economist.
“Overall, it remains too early to determine if there has been any impact on the housing market as a result of June’s EU referendum result.”
Indeed, the market was widely regarded by experts as already heading for a cool-down, following the heated rush to snap up homes at the start of the year ahead of April’s stamp duty deadline. The summer, meanwhile, is traditionally a quiet period, as buyers head on holidays rather than spend their days house-hunting.
The figures arrive just as the Bank of England decided to cut interest rates to 0.25 per cent, a record low, in a bid to stimulate the economy after the Brexit vote.
“This week’s quarter point cut in interest rates certainly won’t send house prices skyrocketing but it will help to further stabilise them,” comments Ben Madden, managing director of London estate agents Thorgills.
“The acute supply shortage was always going to act as a glass floor under prices post-Brexit and the latest rate cut has made that floor a few inches thicker.”
Is the UK becoming a buyer’s property market?
7th July 2016
House price growth showed signs of easing in the UK before the Brexit vote, reveal new figures from Halifax. The UK’s EU referendum result has led to much speculation about falling prices, but with activity naturally slowing following the stamp duty surcharge for second home buyers in April 2016, market conditions were already beginning to put a brake on price increases.
Annual price growth in the three months to June 2016 was 8.4 per cent, according to the lender’s latest house price index, down from the 9.2 per cent recorded in May and the lowest result since July 2015 (7.8 per cent). On a quarterly basis, prices rose 1.2 per cent, down from 1.5 per cent in May and the lowest rise on that measure since December 2014.
On a monthly basis, prices rose 1.3 per cent, with the average price now at £216,823.
Martin Ellis, Halifax housing economist, comments: “There is evidence that the underlying pace of house growth may be easing.
“House prices continue to increase, albeit at a slower rate, but this precedes the EU referendum result, therefore it is far too early to determine any impact since.”
With reports of possible house price falls surrounding the Brexit vote, Jonathan Hopper, managing director of the buying agents Garrington Property Finders, says that he is already seeing signs of sellers becoming more flexible.
“The market’s psychology has fundamentally shifted. While it’s too early to know how much prices have fallen, sellers are already behaving as if a fall is coming. Many of those who have to sell are starting to offer discounts,” he comments.
“Sophisticated, opportunistic buyers smell blood in the water and are beginning to swoop. And while demand from mid-market buyers is hardly robust, many of those who deferred buying during the referendum campaign are coming off the fence as they see price reductions are there for the taking. In the space of a fortnight the property market has reversed its polarity from a seller’s to a buyer’s market.”
UK house prices march upwards, but will it last?
8th June 2016
UK house prices continued to march upwards in May 2016, according to Halifax, but will growth slow down as the year continues?
Prices rose 0.6 per cent from April 2016, cancelling out the previous month’s fall of 0.8 per cent, but the lender notes that the quarterly figures are a more reliable indicator of an underlying trend. Indeed, house prices in the three months to May were 9.2 per cent higher than in the same three months a year earlier, unchanged from April. House prices in the three months to May were 1.4 per cent higher than in the preceding three months, though, slightly below April’s 1.5 per cent and the lowest since November 2015.
“Low interest rates, increasing employment and rising real earnings, continue to support housing demand,” comments Martin Ellis, Halifax housing economist. “The strength of demand, combined with very low supply, is causing house prices to rise at a brisk pace in quarterly and annual terms.”
However, Ellis forecasts that demand could weaken in the coming months, due to increasing affordability issues, which would also cause price growth to cool.
UK house price growth slows following March stampede
9th May 2016
House price growth slowed in the UK in April 2016, according to Halifax, following the stampede of activity in March.
Buyers and investors raced to complete sales in March before the 1st April deadline arrived for the new stamp duty surcharge on second home purchases, fuelling growth in both mortgage lending and property values. The morning after, though, the market suffered the inevitable slowdown, with price growth easing.
House prices fell by 0.8 per cent between March and April, according to Halifax’s latest House Price Index, to an average of £212,321. This, combined with February’s 1.5 per cent fall, offset March’s 2.2 per cent gain.
On a quarterly basis, house prices in the three months to April of 2016 were 1.5 per cent higher than in the preceding three months (November 2015-January 2016), but this was half March’s 2.9 per cent growth and the smallest quarterly increase since November 2015. Year-on-year. prices in the three months to April were 9.2 per cent higher than in the same three months in 2015, but this was below March’s 10.1 per cent and, again, the smallest annual increase since November 2015.
“The frothy exuberance of March now seems a distant memory, as the market returns to normality with a bump,” says Jonathan Hopper, managing director of the buying agents Garrington Property Finders.
“Starved of the stamp duty stimulus, double-digit annual price rises are unlikely to return any time soon. However the sudden cooling of the market may mark an opportunity for buyers, as some sellers are being forced to reassess their overly ambitious asking prices.
“For the first time in more than a year, we’re seeing many mid-range properties in the most desirable locations selling for below asking price – hinting that the power dynamic is shifting from a seller’s to a buyer’s market.”
Confidence in the UK housing market is at its lowest level in over a year, according to the latest quarterly Halifax Housing Market Confidence Tracker. The latest fall continues the downward trend since a high point in May 2015, and comes as consumers feel increasingly uncertain about the wider economy, says the lender.
Nonetheless, the majority of homeowners and industry professionals expect house price growth to continue in the future.
“Current market conditions remain very tight as the severe imbalance between supply and demand persists. This situation, combined with low interest rates and rising employment and real earnings, should continue to push house prices up over the coming months, comments Martin Ellis, Halifax housing economist.
“With demand still strong and supply still chronically low, the net effect is likely to be a gradual return to more normal rates of price growth rather than a serious slowdown,” agrees Hopper.
UK house prices weaken as winter arrives
9th December 2015
House prices weakened as winter settled in the UK, according to Halifax. The lender’s latest report, one of the key indicators of the market’s performance, shows that the country’s property values bucked the overall trend by dipping last month.
Values slipped down 0.2 per cent month-on-month, taking the average house price to £204,522. This marked a 9 per cent growth year-on-year, down from October’s 9.7 per cent annual increase. Indeed, even the quarterly figures saw the market slow down, with prices in the three months to November 2015 1.4 per cent higher than the preceding three months (June to August 2015), half of October’s 2.8 per cent quarterly rise and the smallest rise on this measure since December 2014.
The figures herald a change of pace after a year in which sales and prices have begun to rise again, following a period of uncertainty, both political and financial.
“Solid economic growth, rising real earnings and falls in already very low mortgage rates have combined to stimulate housing demand this year,” comments Halifax’s Housing Economist, Martin Ellis.
The lack of supply, though, remains a long-term problem, despite the short-term correction.
“The increasingly acute imbalance between supply and demand is causing prices to rise at a robust pace,” he adds. “A situation that is unlikely to reverse significantly in the short-term.”Google+