House price growth slumps again in October as Halifax says average property value is up just 0.9% on a year ago
- The lender’s house price index found property inflation fell last month
- Price growth rate of 0.9% in October compared to 1.1% in September
- Experts blamed Brexit-related uncertainty for the stagnant market
House price growth slumped once more in October with property inflation at a 2109 low of 0.9 per cent, according to Britain’s largest mortgage lender.
Halifax found that property inflation fell from the 1.1 per cent annual rise recorded in September, with the average price now £232,249.
The 0.9 per cent rise marked the lowest rate of annual growth in six years, when prices inched up just 0.6 per cent in April 2013.
The bank’s managing director Russell Galley described the figures as an extension of ‘the largely flat trend which has taken hold over recent months’, with consumers ‘erring on the side of caution’.
Halifax found that property inflation fell from the 1.1 per cent annual rise recorded in September, with the average price now £232,249.
Mr Galley added he was ‘unchanged’ in his view that ‘activity levels and price growth will remain subdued while the UK navigates political and economic uncertainty.’
Prices in October were 0.1 per cent lower than September, though that is a smaller fall than the one recorded in last month’s index, when prices fell 0.4 per cent month-on-month.
Mark Harris, the chief executive of mortgage broker SPF Private Clients, agreed with Mr Galley’s assessment that uncertainty was largely to blame for a stagnant market.
He said: ‘This may be the lowest growth in house prices we have seen all year but it is no surprise as Brexit concerns, coupled with a general election, are thrown into the mix. This trend is set to continue until both of these are resolved.’
Howard Archer, chief economic adviser at EY ITEM Club, went further and said UK house prices were ‘going nowhere’ amid ‘uncertain, challenging conditions’.
He added: ‘It is hard seeing the situation changing until there is greater clarity over Brexit and the domestic political situation.’
Figures last week released by Halifax’s rival Nationwide found a largely similar trend, with year-on-year price growth in October just 0.4 per cent, the eleventh month in a row annual inflation had been below 1 per cent in the building society’s index.
House prices fell 0.1% month-on-month in October this year, but more notable was the fact year-on-year growth hit another low
House prices have fallen away since a high of £234,195 in February according to Halifax’s figures, though the index, based on the lender’s mortgage approvals data, has delivered higher and at times erratic growth compared to its rivals this year.
Mike Scot, chief property analyst at estate agent Yopa, said while ‘the housing market continues to be held back by political and economic uncertainty’ due to the impending general election and, at the time, October 31 Brexit deadline, he expected the market to pick back up again.
He said: ‘We expect a resumption of more normal levels of housing market activity once the Brexit outcome is more settled, which may then give a short-term boost to house prices, since the stock of houses for sale is quite low, and demand can react more quickly than supply once the uncertainty is lifted.
‘However, affordability continues to be stretched, especially in the south and east of the country, and we do not expect any sustained above-inflation increase in house prices.’