Home Property UK house prices flat in October; year-on-year rise at more than 5-year low of 1.5%

UK house prices flat in October; year-on-year rise at more than 5-year low of 1.5%

by LLP Reporter
1st Nov 18 7:43 am

The Nationwide reported that house prices were flat month-on-month in October. Prices had previously risen 0.3% month-on-month in September after a drop of 0.5% month-on-month in August.

The three-months/three-months rise in house prices was limited to 0.3% in October, which was the weakest since June.

Annual house price inflation on the Nationwide’s measure fell back to 1.6% in October, which was the weakest since May 2013. This was down from 2.0% in September and August, 2.5% in July and a 2018-peak of 3.2% in January. This is the equal lowest level (with June) since June 2013.

It should be noted that the Nationwide’s measure of house price inflation has been lower than many other measures. Latest data from the Halifax puts annual house price inflation at 2.5% in the 3 months to September while latest data from the ONS/Land Registry put annual house price inflation at 3.2% in August.

Housing market activity currently lacklustre

Housing market activity continues to struggle to gain any momentum. Latest data from the Bank of England show mortgage approvals for house purchases fell back to 65,269 in September after rising gradually to a 7-month high of 66,101 in August from a 2018-low of 63,251 in April (which had also been the second lowest level after December 2017 since August 2016). At 65,269 in September, mortgage approvals still look relatively sluggish. They were down 0.7% year-on-year 65,742 in September 2017 and 19.5% below their long-term (1993-2018) average of 81,084.

It is evident that the housing market is struggling for traction in the face of still limited consumer purchasing power, fragile consumer confidence and wariness over higher interest rates. Brexit uncertainty may also be having some dampening impact on activity.

This is also borne out by latest survey evidence from the RICS. Their September survey reported that “New buyer enquiries were the weakest since March and houses were taking the longest to sell since RICS started asking its members about this regularly in February 2017”.

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