House price growth slows
11-12-2016
A housing economist insists house-price growth remains "stable", despite a drop since last year.
The latest index shows that the price of homes has slowed to 5.2%, which is almost half of the annual growth percentage seen earlier in the year.
October’s rate is the lowest annual increase recorded since July of 2013, when it stood at 4.6%.
Martin Ellis, the housing economist at Halifax, said: "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% in March this year, but remains robust at 5.2%.
"This expected slowdown appears to have been largely due to mounting affordability pressures, which have increasingly constrained housing demand.
"Whilst 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."
Ian Thomas, who is the co-founder and director of online mortgage lender, LendInvest, agreed that the effect of the stamp duty increase had led to a reduced market demand, but hopes the government will address the situation.
However, he warned that other factor may also come into play, adding: "Many are forecasting that the property market may see a slowdown, as the uncertainty around Britain’s withdrawal from the European Union impacts on customer confidence."
Meanwhile, the Halifax reports that mortgage approvals have steadied, with the first rise in four months recorded in September.
The report by Halifax suggests the average house price now stands at more than £217,000, but housing supply has become a major cause for concern with stock hovering around the lowest levels ever reported.