Annual house price growth in the UK is running at 4%, according to the latest Halifax House Price Index results issued this morning. Prices in the three months to September were 4.0% higher than in the same three months a year earlier. The annual rate in September is higher than in August (2.6%) and at its highest growth rate since February.
This is the second successive month that the annual rate of growth has picked up, comments Russell Galley, managing director, Halifax Community Bank. UK house prices continue to be supported by an ongoing shortage of properties for sale and solid growth in full-time employment, he says.
However, increasing pressure on spending power and continuing affordability concerns could dampen buyer demand, he acknowledges. He does not expect the recent speculation on the possibility of a rise in the Bank of England base rate to have a significant effect on transaction volumes.
All indicators up
House prices in the last three months (July-September) were 1.4% higher than in the previous three months (April-June). This is the fastest price growth, on this measure, since February.
House prices rose by 0.8% between August and September. It follows a 1.5% increase in August. The average UK house price is now £225,109 – the highest on record.
Impossible to reconcile
Samuel Tombs, chief UK economist at Pantheon Macroeconomics, says that the the sudden surge is impossible to reconcile with other housing market evidence. “Halifax’s measure is the most volatile of all the indices we track,” he says. “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, he adds. “RICS (the Royal Institution of Chartered Surveyors) has reported that new buyer enquiries have fallen in six of the last seven months,” he sqys.
Samuel Tombs, courtesy of Pantheon Macroeconomics