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Halifax says average house price has now hit nearly £226k

Property values increased 2.3 per cent between August and October, the fastest three-month pace of growth recorded since January, according to latest data from Halifax.

Annual house price inflation of 4.5 per cent last month saw a typical British home hit £225,826, another record high, according to the monthly index from one of Britain’s biggest lenders. 

Property prices had dipped from £222,190 recorded in December 2016 to £218,477 by June, fuelling homeowner fears that values were on a downward spiral.

Rosier outlook: House prices are up more than £7k since June, when prices had dipped this year

However, a lack of supply and low mortgage rates continue to prop up values. The typical home has increased in value by more than £7,000 since the dip seen in June.

Russell Galley, managing director of Halifax Community Bank, said: ‘The supply of new homes and existing properties available for sale remains low.

‘This, combined with historically low mortgage rates and a high employment rate, continues to support house prices and is likely to do so over the coming months.’

He added: ‘Increasing pressure on household finances and continuing affordability concerns are some of the factors likely to dampen buyer demand. 

‘That said we do not anticipate the base rate rise will be a barrier to buying a house.’

Last week, the Bank of England increased interest rates from 0.25 per cent to 0.5 per cent – but experts believe it will have little impact on the property market.

Record high: Prices in October reached £225,826 after dipping to a year-low of £218,477 in June

Record high: Prices in October reached £225,826 after dipping to a year-low of £218,477 in June

Mark Harris, chief executive of mortgage broker SPF Private Clients, says: ‘With demand for housing outstripping supply, property prices continue to be supported with the annual rate of growth continuing to rise.

‘It helps that mortgage rates remain low, and even though the Bank of England raised base rate last week, there are no signs of them shooting up anytime soon.

‘While psychologically the first base rate rise in ten years may affect people’s decision-making when it comes to moving house, signs are that any further increases will be modest and slow, so unlikely to put the brakes on the market.’

Lack of supply: The number of homes for sale continues to fall, propping up prices

Lack of supply: The number of homes for sale continues to fall, propping up prices

There were also two property forecasts out last week that suggested any property price rises in the coming years are likely to be modest.

JLL said that house prices will rise just one per cent on average next year – and values in prime London are set to fall. 

Savills said that typical values across the country will rise 14.2 per cent by the end of 2022. 

Halifax says that the shortage for homes for sale continues to limit activity. It points to Royal Institution of Chartered Surveyors data which shows the balance of new sales instructions falling for the 19th consecutive month in September.

Monthly home sales also continue to exceed 100,000, despite recording a modest fall of two per cent to 100,850 in September.

In the three months to September, home sales were six per cent higher than in the same period a year earlier, according to HMRC.

Despite the recent rise in values, confidence in UK house prices has fallen to its lowest level since December 2012, according to the Halifax Housing Market Confidence Tracker last week.

The survey, which tracks house price optimism, has dropped 14 points from April 2017 (+44) to October (+30), matching the record fall seen following the EU referendum result.

Jeremy Leaf, north London estate agent and a former RICS residential chairman, says: ‘On the face of it, these house price figures are quite encouraging because they continue to demonstrate the market resilience that we have grown accustomed to over the past few months.

‘However, when you look behind the numbers you realise that much of the growth is supported by continuing shortage of supply which we are also finding on the high street.

‘Looking forward there is no doubt that people will continue to trade but more nervously, particularly in the light of higher mortgage costs and pressure on real income.’ 

Read more at DailyMail.co.uk


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