The latest data released from the Halifax has revealed that the annual rate of house price growth has increased from 5.2% to 6% in November. This represents the first rise in 8 months.
According to the report, property prices in the three months to November were 6% greater than at the same period in 2015.
This year, the quarterly figures (between September-November) were 0.8% higher than in the previous three months.
Increased growth
Martin Ellis, Halifax housing economist, noted: ‘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.’[1]
‘Despite November’s pick-up, the annual rate has been on a steady downward trend in recent months since reaching a peak of 10.0% in March. 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,’ he added.[1]
Jeremy Duncombe, Director at Legal & General Mortgage Club, also commented: ‘November’s figures show a slight increase in monthly house price growth, but nothing like the thundering rate that we got accustomed to over the first half of the year. Despite the negative perceptions that often accompany such slowdowns, this cooling of house price inflation should be viewed positively. The fact remains that there is still a huge disparity between wage growth and property price inflation.’[1]
Property price growth increases for first time in 8 months
Early Christmas present
Founder and CEO of eMoov.co.uk, Rusell Quirk, said that the report shows: ‘yet more signs of life shooting from the frosty ground of the UK property market with the first annual increase in eight months providing UK homeowners with an early Christmas gift. Many in the industry have been quick to put the boot in over the last few months where the UK property market is concerned, hanging gloomy predictions on a dwindling level of demand in the market.’[2]
‘It would seem this simply isn’t the case. The driving factor behind inflating house prices is an imbalance between supply and demand and, with house prices spiking this late in the year, it would seem there is certainly a sustained level of buyer demand present in the current market,’ Quirk added.[2]
[1] http://www.propertyreporter.co.uk/finance/house-price-growth-increases-for-first-time-in-eight-months.html
[2] Russell Quirk, eMoov press release, 07.12.16