House prices slip but ‘robust’ increases expected

Housing supply a real issue
Housing supply a real issue

House prices eased back during November and the quarterly rate of growth fell to its lowest level for a year, Halifax has reported.

Prices fell 0.2 per cent between October and November, taking the average value of a UK property to £204,552.

While monthly changes can be volatile, the figures also showed that the quarterly rate of growth, which tends to give a good indication of underlying trends in the market, was the lowest since December 2014 - at 1.4 per cent.

But year-on-year growth remained solid at nine per cent and Halifax said record low interest rates, together with the gap between supply and demand, was set to keep prices rising at a “robust” pace.

Martin Ellis, Halifax housing economist, said: “Solid economic growth, rising real earnings and falls in already very low mortgage rates have combined to stimulate housing demand this year.

“The increasingly acute imbalance between supply and demand is causing prices to rise at a robust pace. A situation that is unlikely to reverse significantly in the short-term.”

Last month’s figures showed a marked cooling off since October, when house prices leapt by 9.7 per cent year-on-year and 1.1 per cent month-on-month.

But Halifax highlighted recent data from the Bank of England and surveyors confirming that demand and supply remain at odds.

The Bank recently confirmed that the number of mortgages for house purchases roseone per cent between September and October, 17 per cent higher year-on-year.

This came as research from the Royal Institution of Chartered Surveyors found the number of homes up for sale dropped for the ninth month in a row, taking supply to a new record low.

Howard Archer, economist at IHS Global Insight, said buyers were being boosted by earnings growth, high and rising employment, robust consumer confidence and low interest rates.