New report by Halifax claims house prices in the UK rose by 4% in the three months up to September.
The price of a house in the UK rose at the fastest rate in eight months in September, as home buyers apparently shrugged off the current Brexit uncertainty and warnings of a consumer spending slowdown – according to mortgage lender Halifax.
Their latest house price survey showed a rise of 4% in the average price of a house in the third quarter of 2017 (July, August and September) compared with the same period last year – the highest year-on-year increase recorded since February.
Halifax’s data goes against the trend of other recent reports that have hinted at a weakening of the house market, particularly in London.
With the housing market currently propped up by dwindling supplies and low mortgage rates, the average cost of a house in the UK now stands at £225,109 – the highest ever recorded. The average price per square foot of a home is now £211, which is an increase of 26% over the past five years.
In releasing their new data, Halifax said that current housing demand could be stifled by rising prices and a squeeze on spending – while also saying that it was unlikely to be too badly affected by the expected upcoming interest rate rise.
Managing director of Halifax Community Bank, Russell Galley, said:
“While the quarterly and annual rates of house price growth have improved, they are lower than at the start of the year.
“UK house prices continue to be supported by an ongoing shortage of properties for sale and solid growth in full-time employment. However, increasing pressure on spending power and continuing affordability concerns may well dampen buyer demand. There has been recent speculation on the possibility of a rise in the Bank of England base rate. We do not anticipate this will have a significant effect on transaction volumes.”
However, not all housing market analysts are convinced by Halifax’s report. Samuel Tombs of Pantheon Macroeconomics said:
“The sudden surge in Halifax’s measure of house prices … is impossible to reconcile with all the other housing market evidence. Halifax’s measure is the most volatile of all the indices we track; the standard deviation of month-to-month changes over the last four years has been two and three times higher than for the official and Nationwide indices, respectively.
“Other surveys show that the pipeline of demand is soft; Rics [the Royal Institution of Chartered Surveyors] has reported that new buyer inquiries have fallen in six of the last seven months. Real wages still have further to fall over the next six months and mortgage rates will rise soon in response to the increase in banks’ funding costs.”