• Kevin Murphy

Britain’s Home Property Sector for Q3 2017

A recent analysis by the financial services firm Halifax indicates that despite economic and political issues the performance of the British housing sector continues to bring a variety of results. The report reviews the Q3 for housing prices which were higher by 2.3% compared to Q2 and marks the fastest price growth since January of this year.

The Latest Results

National home prices for July through October resulted in a 4.5% increase than in the same period in 2016. The annual rate for October is now higher compared with September at 4.0% with it registering as the highest growth rate since February of this year.

Between September and October 2017 home prices have increased by 0.3% after a 0.8% for September. Costs for for homes are averaging £225,826 which is an increase of 2.8% compared to January where average home prices was at £219,741.

Managing Director for Halifax Community Bank is quoted in the report as saying:

“The annual rate of growth has continued to rise for the third month in succession, rising from 4.0% in September to 4.5% in October. The average house price is now £225,826 – exceeding last month’s previous high. House prices in the three months to October were 2.3% higher than in the previous quarter, the fastest quarterly increase since January.

“The fact that the supply of new homes and existing properties available for sale remains low, combined with historically low mortgage rates and a high employment rate, continues to support house prices and is likely to do so over the coming months. Increasing pressure on household finances and continuing affordability concerns are some of the factors likely to dampen buyer demand. That said we do not anticipate the Base Rate rise will be a barrier to buying a house.”

Seasonally adjusted figures by HMRC (Her Majesty's Revenue and Customs) show monthly national home sales are at more than 100,00 despite a decrease of 2% to 100,850 in September but have continued to exceed the 100,000 level since January. In the period of three months to September home sales were 6% higher compared to the same period in 2016.

The Halifax Market Confidence Tracker indicates that confidence UK home process at its lowest level since December 2012.

Also recorded is the House Price Optimism or HPO1 which factors consumer sentiment on the rise and fall of home values over a one year period. Since April 2017 to October the result is a 14 point decrease from +44 to +30 over this particular period.

A decline of 38 points in the HPO has since May 2015 when the it was at +68 before the General Election. Almost half of the consumers in the survey are expecting increases in housing values compared to 45% in April 2013. At least 20% expect prices to decline which is the largest percentage rate since October 2012.

Seasonally adjusted figures from the Bank of England show that for the second consecutive month in September mortgage approvals decreased to 66,232 loans. In the three months to September mortgage approvals had been up by 3% compared to the previous three months before.

As is the case shortages of available homes for sales instructions and buyer enquiries saw a decline in September with Royal Institution of Chartered Surveyors reporting: 

‘The average stock levels on estate agents’ books, on the other hand, remain broadly stable. New buyer enquiries declined in September for the sixth month in succession – and the lowest level since July 2016.’

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