Average house prices dipped slightly last month as supply dropped to a new record low, new data from Halifax has revealed.
According to the latest Halifax house price index, house prices in November fell by 0.2%, slowing the annual rate of growth from 9.7% in October to 9.0%.
While there was fall in house prices, supply reached a record low, which could force prices to increase at a “robust pace”, Halifax said.
The average price of a home across the UK is £204,552. House prices in the latest three months were 1.4% higher than in the preceding three months, the smallest rise since December 2014.
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.”
The number of homes sold between September and October fell 0.2% between to 105,490.
Meanwhile, sales in the three months to October were 4.7% higher than in the same three months in 2014.
Mortgage approvals increased by 1% between September and October and were 17% higher than the previous year.
Halifax said in its 2016 forecast last week that house prices are set to increase by between 4% and 6%, with growth expected to slow more sharply in London than elsewhere.
Jeremy Leaf, former RICS chairman and north London estate agent, said: “Any slowdown in the market may be a short-term blip anyway, as investors are already looking at what will be coming to market in the spring, in order so that they can complete by April to avoid the higher stamp duty take.
“The lack of supply is a huge issue and will also contribute to house-price growth over coming months. Encouragingly, construction numbers are up, and the Government is pledging to build more homes, but there is no room for complacency. While everyone agrees that more building is required, the question is whether there is enough capacity in the market to get the work done.”
Mark Harris, chief executive of mortgage broker SPF Private Clients, said: ‘A number of lenders have hiked their mortgage rates in the past few days, perhaps with an eye to slowing down business over the festive period. However, this should be a short-term trend and we still expect them to price aggressively in the new year in order to get off to a fast start. There may well be some January sales on the mortgage front for borrowers to take advantage of, boosting activity into the spring.”
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