D_Property

Residential property prices in the UK increased by 2.4% in the three months to the end of November, the faster growth for this measure since January, the latest index shows.

The data from lender the Halifax also shows a month on month rise of 0.5%, taking the average price of a home to £226,821. It was the fifth consecutive monthly rise.

The average price is 3.2% higher than in January when it was £219,741 but year on year growth has fallen back from 4.5% in October to 3.9% in November.

‘Whilst the annual rate of growth eased in November, with the first decline in this measure since July, when looking at quarterly change prices in the three months to November were marginally higher than in the preceding three months, the fourth consecutive quarterly increase,’ said Russell Galley, managing director of Halifax Community Bank.

‘The imbalance between supply and demand continues to support house prices, which doesn’t look like changing in the near future. Further ahead, increasing affordability issues, as price increases continue to outstrip wage growth, are likely to curb housing demand and cause price growth to ease. We do expect the Government’s first time buyer stamp duty changes to provide some stimulus to demand, particularly in London and the South East where the impact is greatest,’ he added.

The housing market should continue to build on this momentum after the usual seasonal slowdown in December with the outlook promising for 2018, according to Russell Quirk, chief executive of hybrid estate agents eMoov.

‘A fifth consecutive increase in monthly house price growth certainly makes positive reading given the current market climate, particularly during a traditionally slower time of year as we approach the festive season,’ he pointed out.

‘As the issue of supply is unlikely to be addressed in any meaningful way the lack of stock to meet housing demand should keep prices buoyant, aided by the recent changes to first time buyer stamp duty, although this will bring a marginal influence much further down the line than widely expected,’ he added.

However, Jonathan Hopper, managing director of Garrington Property Finders, believes that quarterly and month on month rates of price growth shouldn’t be seen as anything more than a pyrrhic victory, as the annual trend is down.

‘It’s tempting to dismiss what price growth there is as a mere side effect of the chronically low levels of supply, but that does a disservice to the brisk levels of demand in several regions,’ he said.

‘But demand is being channelled by one over-riding consideration, affordability. With wages falling in real terms and buyers wary of overpaying while the market is in flux, even the most determined buyers are willing to walk away if the price isn’t right,’ he explained.

‘With the flight of capital from London and the most expensive regions still in full flow, we’re once again seeing a market of extremes. At lower price points buyers are struggling to find a property, while the most expensive homes are struggling to find a buyer,’ he pointed out.

‘Few expect the Chancellor’s stamp duty cut to provide a silver bullet for the market and all eyes are now on the Prime Minister to cut a Brexit deal which might just give the market the shot of clarity and confidence it needs to start 2018,’ he added.

But for Alex Gosling, chief executive officer of online estate agents HouseSimple, the figures suggest a housing market in remarkably good health, but low supply levels continue to distort the real picture.

The property market’s not on its knees by any means, but it needs a spark from somewhere. Market activity has dropped off, which it tends to do the closer we get to Christmas. But it’s definitely dropped off earlier than normal this year,’ he said.

‘Buyers are viewing, but when the same properties are coming up on searches every week, and very little new stock is being listed, there’s not a great deal of enthusiasm to take it beyond the viewing stage. Hopefully the Chancellor’s Budget decision to cut stamp duty for first time buyers will give the bottom end of the market the energy boost it desperately needs,’ he continued.

But if home owners further up the chain aren’t selling, there won’t be enough affordable properties coming onto the market. And the Government’s plan to build more affordable homes isn’t going to solve the supply crisis today. The property market will be glad to see the back of 2017, a year when it has had to cope with Article 50 being invoked, a calamitous general election, a rate rise and a constant stream of negative Brexit news,’ he concluded.
The improved performance of the market in the latest quarter suggests the first interest rate rise in a decade may have ignited demand, according to Jonathan Samuels, chief executive officer of property lender Octane Capital.

‘On this evidence, the November rate rise has brought prospective buyers out into the open. Many buyers may have come to the conclusion that it is better to move now while mortgage rates are still low than further down the line when they could be less competitive,’ he said.

‘Ongoing Brexit related uncertainty will also be a factor for many households. It’s hard to know how things will pan out and against that backdrop moving now will be seen as the better option. Despite the slight pick-up over the past three months it’s hard to see prices rising materially. A slow rate of growth is the most likely for 2018,’ he added.

Source: www.propertywire.com

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