Annual house price growth fell again in October, dropping from 5.8% in September to 5.2% – the lowest yearly growth rate since July 2013.
According to the latest Halifax house price index, monthly house prices rose 1.4% in October, the largest increase since March. The average house price was £217,411.
Martin Ellis, Halifax housing economist, said: “Activity levels, like house price growth, have softened compared with a year ago. Home sales, however, appear to have stabilised in recent months following the distortions earlier in the year due to the changes to stamp duty in April.
“Annual house price growth has nearly halved from a peak of 10.0% in March this year, but remains robust at 5.2%. This expected slowdown appears to have been largely due to mounting affordability pressures, which have increasingly constrained housing demand. Whilst house price growth may ease further in the coming months, very low mortgage rates and a shortage of properties available for sale should help support price levels.”
Home sales have broadly stabilised in recent months having largely plateaued following the increase in stamp duty on second home and buy-to-let purchases earlier this year.
Figures from the Bank of England show the volume of mortgage approvals for house purchases also increased in September – the first monthly rise for four months.
However, the stock of homes available for sale remains around the lowest levels ever recorded, Halifax said.
Last week, Nationwide’s survey showed that house price growth remained unchanged on a monthly basis following 15 consecutive months of rises.
Rob Weaver, director of Investments at property crowdfunding platform Property Partner, said: “It’s encouraging news for investors with the strongest performing month after the EU referendum vote in June.
“Despite a clear softening in house price growth due to questions over affordability and demand from investors, the dust has seemingly started to settle.
“The market suffered an initial wobble post-Brexit but is proving resilient, mostly the result of the severe supply shortage that’s helping to prop up prices.
“The finger of blame for buyer uncertainty is pointing directly at the stamp duty hike in April but demand seems to have also steadied. Mortgage approval levels, albeit down on a year ago, appear to have found their balance.”
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