House price growth flattens in October

House price growth flattens in October

According to the latest data released this morning from Halifax, house prices in the three months leading to October are 5.2% higher than in the same period a year earlier.

This compared to 5.8% in September and continues the downward trend seen over the past six months after the annual rate reached 10.0% in March. October’s 5.2% is the lowest yearly growth rate since July 2013 (4.6%).

The lender confirmed that home sales have broadly stabilised in recent months. Notwithstanding, monthly fluctuations, sales have largely plateaued in the past few months following the distortions earlier in the year due to the increase in stamp duty on second home and buy to let purchases. Nonetheless, UK home sales in 2016 Quarter 3 (July to September) were 8% lower than in the same period last year, indicating an overall softening in activity.

Mortgage approvals have also steadied. The volume of mortgage approvals for house purchases – a leading indicator of completed house sales – increased in September; the first monthly rise for four months. Overall, the level of approvals appears to have broadly stabilised over the past three months albeit at a lower level than a year ago. Approvals in 2016 Quarter 3 were 12% lower than in 2015 Quarter 3.


Supply remains historically very low

The stock of homes available for sale was largely flat over the three months from July to September, but it remains around the lowest levels ever recorded.

Martin Ellis, Halifax housing economist, said: “House prices in the three months to October were largely unchanged compared with the previous quarter. The annual rate of growth continued on its recent downward trend, easing to 5.2%.

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%. 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, Co-Founder and Director of online mortgage lender LendInvest, had this to say: "October has seen a flattening out of house price growth, with a real effect of the stamp duty changes feeding through to reduced market demand. This is something that we are seeing industry call on the government to address in the upcoming Autumn Statement and Housing White Paper publication.

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Tony Gimple
Tony Gimple 09 Dec 2017

Linking professionalism to limited company borrowing is a flawed concept. Despite S24 etc., limited companies are the most tax inefficient way of running a property business and leave borrowers seriously...

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Evelyn Attwood
Evelyn Attwood 01 Dec 2017

It's normal. If you plan to buy a house in one of the most beautiful spots in the country you should pay a high price.

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Evelyn Attwood
Evelyn Attwood 01 Dec 2017

I think that the situation will be the same at December.

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Scott Garnet
Scott Garnet 06 Nov 2017

If you have a patio or a porch it is important to make sure that any connecting doors are secured. Good advice for sliding glass doors is replacing the panels with storm resistant glass and getting heavier...

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richardrawlings
richardrawlings 01 Nov 2017

What has not been mentioned here is the effect of not only higher interest payments, but also that these payments are less likely to be offsettable as a business cost due to the scaling back of mortgage...

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Kelvin Lloyd
Kelvin Lloyd 09 Oct 2017

IT is up, to the Planners. If they will only give permission for bungalows on certain (suitable) sites, they will be built.

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maggie swift
maggie swift 09 Oct 2017

It's just the beginning of the shocking rise.

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maggie swift
maggie swift 09 Oct 2017

I have recently read that the bungalows can provide social housing for elderly residents in London.

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zoe glover
zoe glover 05 Oct 2017

Update! Worst company I have ever dealt with. Undervalued a Cambridge property by over 100k, wont take on any evidence of valuation including a RICS valuation done 3 years ago for the very same value...

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Paul Edwards
Paul Edwards 27 Sep 2017

Its nonsense articles such as this that make it harder to get clients to realise just how difficult the market is out there. When you see Rightmove and there are more 'price reduced' then 'new' most days...

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Tom Allen
Tom Allen 20 Sep 2017

Absolutely agree with you!

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RyanGeo
RyanGeo 18 Sep 2017

A sharp correction would be a less dramatic expression to use. That is already underway in certain sectors in Reading where I practice as Chartered Surveyor

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