Halifax: house price growth still cooling
Annual house price growth drops for fourth straight month.
The rate of house price growth is continuing to slow, according to the latest Halifax house price index.
It shows average house prices grew slightly by 0.4% between October and November, reversing the 0.4% decline recorded in October.
However, the annual rate of growth slowed to 8.2% in November from 8.8% in October. This is the fourth straight month of decline and the lowest annual rate since February. Overall house price growth has dropped from a summer peak of 10.2% in July.
Halifax says the cost of an average UK home is now £186,941.
Price changes
Here’s how prices have changed over the last 12 months, according to Halifax’s index.
|
|
Monthly % change |
Quarterly % change |
Annual % change |
Average price |
|
November 2013 |
0.8% |
2.2% |
7.7% |
£174,290 |
|
December 2013 |
-0.4% |
2.1% |
7.5% |
£173,677 |
|
January 2014 |
1.2% |
1.9% |
7.3% |
£175,736 |
|
February 2014 |
2.5% |
2.2% |
7.9% |
£180,163 |
|
March 2014 |
-1.2% |
2.3% |
8.7% |
£177,996 |
|
April 2014 |
-0.3% |
2.3% |
8.5% |
£177,524 |
|
May 2014 |
4.0% |
2.0% |
8.7% |
£184,566 |
|
June 2014 |
-0.4% |
2.3% |
8.8% |
£183,825 |
|
July 2014 |
1.2% |
3.5% |
10.2% |
£186,073 |
|
August 2014 |
0.0% |
2.9% |
9.7% |
£186,101 |
|
September 2014 |
0.4% |
2.7% |
9.6% |
£186,898 |
|
October 2014 |
-0.4% |
0.9% |
8.8% |
£186,223 |
|
November 2014 |
0.4% |
0.7% |
8.2% |
£186,941 |
Halifax’s report broadly supports Nationwide’s most recent house price figures, which also found that prices had dropped from a summer high.
Why prices are slowing
So what’s behind the slowdown?
Halifax points to the low levels of mortgage approvals and the impact this has had on demand for property.
Figures show approvals have fallen 22% from 76,574 in January 2014 to 59,426 in October 2014, in part due to a tightening of mortgage lending rules.
The knock-on effect of this decline is that house sales fell below 100,000 in October to 98,490 for the first time in 2014.
Halifax predicts further moderation in house price growth over the next year, with house prices nationally expected to increase by between 3-5%.
It says the prospect of higher interest rates at some point in 2015 and the deterioration of affordability will be key factors curbing housing demand. However, housing demand should be supported by strong economic growth, low unemployment, mortgage rates that are still relatively low and the first gain in ‘real’ earnings for several years.
Changes in Stamp Duty announced in the Autumn Statement should also help incentivise people to move home.
Overall the bank expects to see a more even regional pattern in house price growth during 2015.
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