Annual house price growth slows

The latest Halifax House Price Index shows that growth is slowing, with prices in the last three months to January falling.

However, the index still shows that prices are 2.2% higher than in the same three months for 2017, although the annual change in January was lower than in December (2.7%).

House prices have remained largely unchanged in the recent quarter from the previous quarter of August-October; on this measure prices are down from the 1.3% quarterly rise recorded in December.

Looking at the figures on a monthly basis, prices have fallen for the second consecutive month in January, by 0.6% following a 0.8% decrease in December.

The average price of homes is now at £223,285, 1.9% higher than in January 2017 (£219,217), edging down from a record £226,408 in November.

Russell Galley, Managing Director, Halifax Community Bank, said: “Annual house price rises have slowed from 2.7% in December to 2.2% in January – the lowest rate since July last year. We’ve seen a monthly decline as well as the quarterly rate of growth flattening out.

“Although employment levels grew by 102,000 in the three months to November, household finances are still under pressure as consumer prices continue to grow faster than wages. Additionally, it’s still too early to see any impact for first-time buyers from the abolition of stamp duty on purchases of up to £300,000, which was announced in the November Budget.

“Despite the recent rise in the Bank of England Base Rate, mortgage rates are still very low. This, combined with an ongoing acute shortage of properties for sale, will continue to underpin house prices over the coming months.”

The Index also notes that there has been a continuing decline in instructions for sale. New instructions to sell continue to deteriorate and have now been losing ground for 23 consecutive months – the worst sequence for almost eight years. Although average supply per agent remains broadly stable, it is still close to historic lows.

Following promises of Government assistance, and the abolition of stamp duty charges for most, the number of first-time buyers is estimated to have reached 359,000 in 2017, rising by 6% in the last 12 months. First-time buyers now account for half of all house purchases with a mortgage, an increase from 36% a decade ago. This increase in numbers has come despite the average deposit nearly doubling from £17,740 in 2007 to £33,339 a decade later.

 

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