Economic uncertainty, driven by ongoing Brexit negotiations, helped drag UK property price growth to its slowest rate since 2013.
According to the latest Halifax house price index, house prices in September rose by just 1.1% year-on-year to £232,574 ($286,029) — the lowest rate of growth since April 2013. The average house price also marked a 0.4% drop month-on-month.
Halifax said economic uncertainty is likely to keep property price growth subdued in the immediate future.
“Annual house price growth slowed somewhat in September ... Whilst this is lowest level of growth since April 2013, it remains in keeping with the predominantly flat trend we’ve seen in recent months,” said Russell Galley, managing director, Halifax.
“Underlying market indicators, including completed sales and mortgages approvals, continue to be broadly stable. Meanwhile for buyers, important affordability measures – such as wage growth and interest rates – still look favourable. “Looking ahead, we expect activity levels and price growth to remain subdued while the current period of economic uncertainty persists.”
Halifax pointed out that sales actually rose in August, up by 16% from July and the highest level since November 2018 — meaning homes are selling, but prices aren’t rising as fast as sales.
"These most recent of statistics from one of the country's volume mortgage lenders are the latest in a very mixed picture and one that adds to confusion as to what on earth the property market is really doing. The various indexes of late have not only contradicted each other but often contradict themselves month on month – in fact, the numbers have bounced around like a beach-ball on a bungee rope since the beginning of the year,” Marc von Grundherr, director at London estate agency Benham & Reeves, said in a statement sent to Yahoo Finance UK.
“The upshot is that whilst the monthly rate of increase in house prices across the UK is negative, the fact that the year-on-year numbers are still positive, quite honestly defies the gravity that the current political fracas should otherwise be dictating. A post-Brexit bounce? We live in hope.”
Meanwhile, mortgage approvals fell slightly from July. Bank of England figures show that the number of mortgages approved to finance house purchases were 65,545 in August – this represents a 2.2% fall from July, Halifax pointed out.
"Resilience seems to be the underlying trend in UK property values overall. Westminster shenanigans seem unable to tarnish the gloss from the market and we continue to see almost uninterrupted house price growth on an annual basis albeit that that growth is certainly more subdued,” Shepherd Ncube, founder and CEO of Springbok Properties, the fast home-sale agent, said in a statement sent to Yahoo Finance UK.
“You can be forgiven for thinking that a 0.4% decrease in values since August is startling however it is by no means the most stand-out stat of the last few months with, for instance, January's Halifax data showing a 2.9% drop on the month before but then a 5.9% rise the next month. Perhaps it's about time we paid less attention to the minutiae of frequent house price statistics and just focussed upon a property being a home instead?"