November house price boost belies downward trend
Average UK property prices in the three months to November were 6.0% higher than in the same three months of 2015, but annual growth is still down from earlier this year, according to figures from Halifax.
The lender also recorded a monthly house price increase of 0.2% between October and November, and a quarterly rise of 0.8% – taking the average property price up to £218,002.
Martin Ellis, Halifax housing economist, said: “House prices in the three months to November were 0.8% higher than in the previous quarter. This increase followed little movement in prices on this quarterly measure in both September and October. The annual rate of growth also increased, rising for the first time for eight months, from 5.2% in October to 6.0%.”
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.
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.”
Ian Thomas, co-founder and director of online mortgage lender LendInvest, added: “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.
“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.”