Halifax: “glacial” rate of house price growth

October saw house prices fall by 0.1% on a monthly basis, according to Halifax.

In the latest quarter (August to October) house prices were 0.2% higher than in the preceding three months (May to July).

House prices in October were 0.9% higher than in the same month a year earlier.

Russell Galley, managing director of Halifax, said: “Average house prices continued to slow in October, with a modest rise of 0.9% over the past year. While this is the lowest growth seen in 2019, it again extends the largely flat trend which has taken hold over recent months.

“A number of underlying factors such as mortgage affordability and wage growth continue to support prices, however there is evidence of consumers erring on the side of caution.

“We remain unchanged from our view that activity levels and price growth will remain subdued while the UK navigates political and economic uncertainty.”

Jonathan Hopper, managing director of Garrington Property Finders, added: “The pace of price growth remains glacial rather than grim, but a long, hard winter is in prospect. Yet despite another slowdown – down to the weakest pace yet tracked this year – the annual pace of price rises remains firmly in positive territory.

“The calling of an election typically applies the brakes to house prices, but this latest softening in prices could also be the result of a partial unblocking of the market.

“HMRC data shows the number of homes changing hands jumped by 5% between August and September, up to its highest monthly total for more than two years.

“Mortgage approvals are inching upwards too, suggesting there is a core of committed buyers who see the current flatlining prices as an opportunity to get a good deal. With interest rates at rock bottom and average wages rising at a decent clip, a steady stream of tactical buyers are asking themselves the question ‘if not now, when?’

“Their pragmatic logic is this – with prices already soft and competition among buyers fairly subdued, it is now possible to drive a very hard bargain and secure a significant discount.

“Of course no-one likes the idea of buying a home today that may be a bit cheaper six months down the line. And as a result there is a second camp of buyers who are opting to hold off until the Brexit uncertainty ends.

“But with the election result, not to mention the Brexit endgame, impossible to predict, the current inertia is set to drag on. And with it, buyers could soon become as polarised as voters. One buyer’s fear of the unknown is another’s opportunity.”

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