Home Property House price growth shows signs of recovery

House price growth shows signs of recovery

by LLP Reporter
8th Jan 19 2:21 pm

According to the latest House Price Index from The Halifax, house prices in the three months to December were 1.3% higher than in the same three months a year earlier – up from the 0.3% annual growth rate recorded in November.

House prices in the latest quarter were 0.4% lower than in the preceding three months but on a monthly basis, house prices increased by 2.2% in December, following a 1.2% fall in November.

Russell Galley, Managing Director, Halifax said:

“In December the average cost of a home was £229,729 and annual house price growth stood at 1.3%. A stronger monthly growth figure for December improved from a weaker November. Overall, house price growth in 2018 was very much within the range of 0-3% as we forecast at the start of the year.

In 2019, we’re expecting continued stability in house prices with between 2% and 4% price inflation. This is slightly stronger than 2018, but still fairly subdued by modern comparison. However, this expectation will clearly be dependent on the Brexit outcome, with risks to both sides of our forecast.

Of course, there are a number of other factors that will impact the market in 2019. The need to raise a significant deposit still acts as a restraint for those looking to buy a new home, limiting the number of potential purchasers.

This year, mortgage payment affordability is more difficult to predict. There are competing pressures with signs of positive annual pay growth supporting affordability, but risks associated with the potential for higher interest rates are pulling in the other direction. On balance we do not see affordability pushing house price growth significantly in either direction.

The shortage of homes for sale and continuing low levels of housebuilding both constrain the supply of houses, and in turn support high prices, which will continue to inhibit demand in 2019.”

CEO and Property Expert, Andy Soloman, commented:

“Somewhat of a shock result with the housing market staging one of the great, late comebacks in 2018, although a string of shoddy results means that prices are still down on a quarterly basis.

Despite the strong monthly growth, this erratic movement will do little to stabilise a market that has and will continue to suffer from wider political uncertainty.

While other external factors such as mortgage affordability and a lack of stock may continue to stimulate the market to a certain extent, we’ve already seen a number of inbound buyer and seller enquiries stating concerns over Brexit so far this year.

This political rot is setting in at all levels of the market, not just the upper echelons and while largely restricted to London and the South East, this air of trepidation is likely to persist until the credits roll on the government’s comedic Brexit offering.”

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