The most recent House Price Index continues to perpetuate the claim that the housing market has reached a house price affordability ceiling point as the figures suggest the slowest price increases in five years.
According to the Halifax House Price Index for October, the average price of a UK home is £227,869 and a monthly increase of 0.7%.
Optimistically, this marks the first monthly increase in three months with the last increase in house prices taking place in the month of July.
However, this was also the highest average house price of 2018. Currently prices are almost £2,000 lower than July’s average of £229,776.
Prices in the three months leading up to October were 1.5% higher than in the same three months of 2017. This does show severe slowing of the annual growth of 2.5% annual growth recorded in September.
Additionally, this is the slowest rate of growth since 2013. House prices in the latest quarter of 2018 were only 0.2% higher then the preceding three months of May to July.
Russell Galley, Managing Director, Halifax, said: “The annual rate of house price growth has fallen from 2.5% in September to 1.5% in October, which is the lowest rate of annual growth since March 2013. However, this remains within our forecast annual growth range of 0-3% for 2018.
“House prices continue to be supported by the fact that the supply of new homes and existing properties available for sale remains low. Further house price support comes from an already high and improving employment rate and historically low mortgage rates which are creating higher rates of relative affordability. We see this continuing to be the case over the coming months and we remain supportive of our 0-3% forecast range.”
As the housing market begins to slow down more significantly, many will feel that more needs to be done to stimulate growth and housing stock that could improve the market. When governmental figures indicate that they may fall short of the 300,000 new house targets over the next five years, the market could struggle to resurrect itself in the short term.
What does this mean for the conveyancing sector? Have you noticed a distinct slowing in the housing market?