House prices experienced biggest rise since March
11-10-2016
According to Halifax’s latest house price report, October saw a house price increase of 1.4%, making it the biggest monthly rise since March.
After Nationwide published its more pessimistic outlook on property prices recently, Halifax has now published its counterpart giving a more positive feedback for October 2016.
Whilst Halifax’s index contradicts the Nationwide statement, it has previously given a more negative review of house prices. Looking back on recent months, the Halifax report showed monthly falls in July and August, followed by a slight rise in September.
Viewed on a rolling three-months basis, year-on-year growth in the quarter to the end of October was 5.2%, a decrease from 5.8% in the period before. This also indicates only half the rate of growth from the three months to March (a rate of 10%).
On average, a home in the UK now costs £217,411.
The increase in monthly prices was explained by the rise in buyer demand, caused by falling mortgage rates. On top of that, the Royal Institute of Chartered Surveyors (Rics) recorded a shortage of homes on the market, partially caused by price falls over the last couple of months.
Martin Ellis, a housing economist at Halifax, said:
“This expected slowdown [in house price growth] appears to have been largely due to mounting affordability pressures, which have increasingly constrained housing demand.”
Andrew Wishart from Capital Economics said: “Data from Halifax point to house prices stagnating in the third quarter. That echoes the broad picture outlined by other indices that, while house price growth slowed in the wake of the referendum result, there is no evidence of any substantial fall in values.”
Capital Economics has forecast an overall slowdown in house price growth to an annual rate of 2% by the end of the year.