Real Estate Residential

UK residential real estate price inflation eases in November

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The latest barometer of UK residential real estate prices suggests end of the year lethargy is creeping into the market. UK high street lender Halifax’s monthly index shows the annual rate of property price inflation eased in November.

Halifax said the average price of UK residential real estate, was 0.5% higher in November than October and increased by 3.9% compared with a year earlier. In October, house prices were up 0.3% on the month and by 4.5% on the year.

The slowdown in the pace of annual house price growth – the first fall since July – likely comes as more households turn towards the Christmas period. That’s a typical seasonal trend, as thoughts of moving house slides to the back of many people’s minds.

Lack of property still supporting prices

Meanwhile, although the rate of annual residential real estate price inflation eased in November, the three-month measure of property prices edged higher.

Halifax reports the average UK house price rose 2.4% in the three months to the end of November, compared with the previous three months. That’s the fourth straight quarterly increase and follows a gain of 2.3% in the three months to October.

“The imbalance between supply and demand continues to support house prices, which doesn’t look like changing in the near future,” said Russell Galley, Managing Director of Halifax Community Bank.

“Further ahead, increasing affordability issues, as price increases continue to outstrip wage growth, are likely to curb housing demand and cause price growth to ease,” Galley said. Although, he added: “We do expect the Government's first-time buyer Stamp Duty changes to provide some stimulus to demand.”

Mixed backdrop supportive of real estate price growth

The economic backdrop to real estate values remains mixed. However, the lack of property – both in the UK and available for sale – will continue to prop up prices, regardless of other details.

That outlook comes despite a slowdown in mortgage approvals in October and the likelihood of further BOE and mortgage interest rate rises in 2018.

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