UK house prices see biggest rise since March

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.”