Halifax has reported that house price growth between July and September was 1.8% higher than in the preceding three months, marking the third consecutive quarterly rise.
Halifax revealed that on a monthly basis, average house prices fell by 1.4% in September, the second consecutive fall for this measure.
Mortgage approvals showed a small rise in August. Bank of England industry-wide figures show that the number of mortgages approved to finance house purchases – a leading indicator of completed house sales rose to 66,440 in August from 65,156 in July. The figure is very close to the 5 year average approval rate of 66,550, but is 2,000 above the monthly average for the previous 12 month period of 64,638.
The number of completed UK home sales remains near the monthly average for the past 12 months. On a monthly basis, sales rose between July and August to 99,120. In the three months to August sales increased by 1.2% from the previous three months. The volume of residential transactions has been broadly flat over the past year and is likely to remain so in the coming months.
Russell Galley, Managing Director, Halifax, said: “With the annual rate of house price growth easing to 2.5% in September from 3.7% in August and the quarterly rate of growth remaining at 1.8% for the second month, we are seeing a steadying in house price inflation across these more stable measures.
This is set amongst mortgage approvals and completed house sales remaining broadly unchanged, although a gradual pickup in wage growth has helped to support household finances.
The annual rate of growth is near the top of our forecast range of 0-3% for 2018, as a low supply of new homes and existing properties for sale, combined with historically low mortgage rates and a high employment rate, continue to support house prices”
As ever, the property industry was quick to react. Here's what they're saying...
Russell Quirk, founder and CEO of Emoov.co.uk, commented: “A 1.4% drop over the month may prompt many UK sellers to run for the hills, but this was always on the cards given the very rapid rate of growth seen over August. The market is by no means excelling, but we are certainly in a stronger position than we were last year as a steady stream of buyer activity has seen the market keep plodding on.
The issue isn’t due to appetite, mortgage approvals are increasing, sales are completing, but with stock levels at their lowest in a decade, we need more on the menu to fuel the UK property market machine.
While price growth may remain erratic month to month until greater political stability prevails, this lack of stock, coupled with the fact that the construction of new build developments is falling, will see prices continue to creep up in the mid-term.”
Jonathan Samuels, CEO of Octane Capital, said: “Price growth in September usually speeds up, but this year it went down a few gears.
While one month isn’t a fair snapshot of the market, the relatively sharp drop-off in the annual growth rate is a reminder of how febrile conditions remain. For now, a strong jobs market, low borrowing rates and a lack of stock are negating high living costs, interest rate uncertainty and Brexit concerns to keep the market in the black.
Few would disagree with the Halifax that we are in a sub-3% zone for annual price growth.The last quarter of 2018 is likely to be as uneventful as the previous three.
Andy Soloman, Yomdel CEO, says: “While mortgage availability remains very affordable and we’ve seen a slight lift in the earnings available, a decade wide lull in homes entering the market suggests that consumer confidence isn’t as prevalent across the property market as it is in other areas of the economy.
The market certainly seems to have avoided any predicted nose dive but will continue to lose altitude until the government gets its house in order over Brexit.
In the short-term, monthly price growth should remain static as we enter the time of year when other areas of the economy, such as the retail sector, receive a welcome boost in consumer spending, while the property market takes a back seat.”
Lucy Pendleton, founder director of independent estate agents James Pendleton, had this to say: “This bulletin is as clear as mud but it’s the sharp monthly drop on August’s prices that sticks out because of its timing.
September is a month that normally sees a burst of activity as people return from holiday and go back to work. So a fall of this scale is quite a retreat at a time when increased competition among those racing to move by Christmas would normally give the market a bit of buoyancy.
The concern is that legions of Brits didn’t get back from holiday and head straight out again to the estate agent like they normally do. The back to work bounce is nowhere to be seen.”
Jonathan Harris, director of mortgage broker Anderson Harris, says: "The average property price may be stable but this masks significant regional variations. Deals are falling out of bed as buyers become increasingly jittery over Brexit and the very real prospect of a Corbyn government, with some of those who don’t have to move now deciding to take a ‘wait and see’ approach instead.
For those who are willing to get on with it, there are deals to be done, as long as sellers are prepared to be realistic on price. Mortgage lenders are keen to have a brisk autumn, resulting in some competitive fixed-rate products in particular."
Jeremy Leaf, north London estate agent and a former RICS residential chairman, comments: "Results from the country’s largest lender, as a snapshot for the health or otherwise of the housing market, always deserve attention. After last month’s rather mixed bag, there is still no clear direction with house price growth continuing to slow. Sluggish transactional activity is bad for the property market but much worse for the economy.
On the ground, sellers have not shrugged off Brexit concerns to put their properties on the market to sell in sufficient numbers to make a difference. However, buyer interest has improved in what remains more of a needs-driven market since people return from a protracted summer break."
Chris Taylor, managing director of Regency Residential responded: “Fluctuating sales volumes mirror the overall sentiment among British consumers, who are uncertain about the future, politically, socially and economically. And while the market is showing signs of resilience, it’s clear that until current external pressures are concluded, and consumer confidence increases, the UK housing market is likely to remain steady at best.
Although house prices in Central London continue to fall, demand in satellite commuter towns such as High Wycombe is driving the market forward, ensuring a solid foundation for the future stability of the sector.”