House price growth was stronger than expected in October, according to figures from Britain’s largest mortgage lender. Halifax said annual house price growth in October was 9.7%, up from 8.6% the previous month. According to the Halifax house price index, property prices rose 1.1% in October following a decline of 0.9% in September. The increase […]
House price growth was stronger than expected in October, according to figures from Britain’s largest mortgage lender.
Halifax said annual house price growth in October was 9.7%, up from 8.6% the previous month.
According to the Halifax house price index, property prices rose 1.1% in October following a decline of 0.9% in September.
The increase brought the average price of a property up to £205,240, meaning buyers are now having to pay £18,771 more than they would have a year ago.
On a quarterly basis, prices were up 2.8%.
With improving economic conditions and household finances, coupled with low mortgage rate deals, demand for housing remains strong.
However, supply is failing to keep up with demand and property prices are soaring as a result of the imbalance.
Halifax pointed towards figures from the Royal Institution of Chartered Surveyors highlighting the record low levels of supply. According to institute, the number of homes coming onto the market in September fell for the eighth successive month, which contributed to the low stock of properties across the UK.
Martin Ellis, Halifax housing economist, said: “Improving economic conditions and household finances, together with sustained low mortgage rates, have boosted housing demand during 2015. Strengthening demand is filtering through in to higher sales levels although the ongoing shortage of supply is acting as a significant constraint on activity.
“The imbalance between supply and demand is likely to persist over the coming months, maintaining upward pressure on house prices.”
Jeremy Leaf, former RICS chairman and north London estate agent, said: “These figures are worrying as they suggest a continuing upwards trend which risks marginalising first-time buyers even further and is therefore not good for the health of the market. There is not enough balance in the housing market and there are still significant barriers to entry, despite lower mortgage rates.
“If prices continue their upwards trend, it doesn’t bode well for those trying to get themselves into a new home early in the New Year. Prices are high and supply low – that imbalance makes life very tricky for buyers. Those looking forward to welcoming in the New Year in a new home might be struggling to achieve this unless they are prepared to pay for it.”
