House price growth continues to slow and prices are dropping month-on-month, says Halifax's latest survey.
House prices are continuing their gradual slowdown, says the latest house price index from Halifax.
Average prices in October dropped by 0.8% compared to September, while the annual rate of growth slowed to 8.8% from 9.6% in September. This is the fifth monthly decline in a year, while the annual rate of house price growth has dropped from a peak of 10.2% in July.
The average UK home according to Halifax is now worth £186,135.
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Why prices are slowing
Halifax says low levels of mortgage approvals are one of the reasons for the slowdown, with demand for properties dropping as a result.
It also says the prospect of an interest rate rise next year could put many people off buying a home, leading to a further dip.
[SPOTLIGHT]Martin Ellis, Halifax’s housing economist, said: “A recent Halifax survey found that many borrowers are concerned about the impact a rise could have on their monthly mortgage repayments over the next 12 months. This concern is likely to curb buying intentions.”
Halifax’s report broadly mirrors Nationwide’s most recent house price statistics, which also found that prices had dropped from a summer high, although in this case in June.
The mortgage approval process has tightened significantly following new regulations introduced in April and this appears to be having a knock-on effect on the property market.
Approvals have fallen by 20% since the start of the year and are now at a 14-month low.
The Centre for Economic Business Research has predicted that house prices will fall next year, which would be the first annual fall since the financial crisis.
Mortgage rates still falling
If you are looking for a mortgage, either to fund a home purchase or for a remortgage, and your credit rating is in good shape, the good news is fixed mortgage rates are continuing to fall to new lows. That's because banks and building societies are looking to grab new customers before interest rates start to rise.
There's more on this in Fixed mortgage rates keep tumbling.
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