During the month of October, the growth of house prices continues to slip further, with inflation now at its lowest level in six years. The study by Halifax found that property inflation fell to 0.9 per cent from the 1.1 per cent annual rise recorded in September. The average house price is now £232,249.
This property market slowdown has made itself present amid concerns over Brexit in the past year. Now, with the general election on its way, the number of homes being put up for sale has been put on pause, according to estate agents.
The 0.9 per cent rise represents an average increase of £165 per month over the last year. According to a report by the Royal Institution of Chartered Surveyors, comes coming to the market are running at a much lower level than in recent years.
Halifax’s managing director, Russell Galley, described the recent figures as an extension of the “largely flat trend which has taken hold over recent months”, with consumers “erring on the side of caution”. He then went on to add that he was “unchanged” in his view that “activity levels and price growth will remain subdued while the UK navigates political and economic uncertainty.”
October prices were 0.1 per cent lower than September. However, that fall is smaller than the one recorded in last month’s index, where prices fell by 0.4 per cent month-on-month.
While the property market has stalled, there are some buyers who have been making the most of these price cuts. As such, sellers are willing to accept lower offers. According to figures by Zoopla, those who live in London and the commuter belt are getting the best deals.
Mark Harris, the chief executive of mortgage broker SPF Private Clients, also believes that uncertainty plays a significant role in the current market climate.
He said: ”this may be the lowest growth in house prices we have seen all year but it is no surprise as Brexit concerns, coupled with a general election, are thrown into the mix. This trend is set to continue until both of these are resolved.”
Howard Archer, chief economic adviser at EY ITEM Club, followed this by saying that UK house prices were “going nowhere” amid “uncertain, challenging conditions”.
He added: “It is hard seeing the situation changing until there is greater clarity over Brexit and the domestic political situation.”
Halifax’s rival, Nationwide, recently released house price figures that demonstrated a similar trend. Year-on-year price growth in October was only 0.4 per cent, the eleventh month in a row where annual inflation had been below 1 per cent according to the building society’s index.
Despite the price drop of properties, Halifax’s index, which is based on their mortgage approvals data, has delivered higher and sometimes erratic growth compared to its rivals this year.
Mike Scott, chief property analyst at estate agent Yopa, said that while “the housing market continues to be held back by political and economic uncertainty” as a result of the upcoming general election and that he expects the market soon pick up again.
He said: “We expect a resumption of more normal levels of housing market activity once the Brexit outcome is more settled, which may then give a short-term boost to house prices, since the stock of houses for sale is quite low, and demand can react more quickly than supply once the uncertainty is lifted.
“However, affordability continues to be stretched, especially in the south and east of the country, and we do not expect any sustained above-inflation increase in house prices.”
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