House prices continue to edge up in November

House prices in the UK went up by 0.2% in November, the third successive monthly increase taking the value of the average property to £218,002, a 6% increase on 12 months ago.

The latest Halifax house price index showed that compared to the last quarter to the end of August, house prices went up by 0.8% in the three months to the end of November.

The quarterly increase is an improvement on the last two months when the quarterly rate was broadly unchanged, though well below the peak quarterly increase of 3% recorded in February.

Overall the annual rate of house price growth has been slowing in recent months from its peak of 10% in March, but November’s rate of 6% is the highest since August when it was 6.9%.

Martin Ellis, Halifax housing economist, said: “Despite November’s pick-up, the annual rate has been on a steady downward trend in recent months since reaching a peak of 10.0% in March.

“Heightened affordability pressures, resulting from a sustained period of house price growth in excess of earnings rises, appear to have dampened housing demand, contributing to the slowdown in house price inflation.

“Very low mortgage rates and an ongoing, and acute, shortage of properties available for sale should help support price levels although annual house price growth may slow over the coming months.”

The latest Halifax Housing Market Confidence Tracker found confidence in the UK housing market is at its lowest point in three years but the majority of people still expect house prices to rise. It is down from a high of +56 in March to +42 now but more than three times the number of people, 57%, expect average UK prices to be higher in 12 months’ time, than expect a lower average price, 15%.

Halifax said home sales have been steady, but are lower than a year ago but that there are signs that sales have largely stabilised after the market distortions of earlier in the year from the increase in stamp duty on second home and buy to let purchases in April.

Mortgage approvals have remained steady but did increase last month. These are the most reliable indicator of completed house sales but, Halifax said, the supply of homes remains historically low with stock levels at the lowest ever recorded level. However, Halifax reported “more encouraging news regarding the building of new homes,” with completions and starts in England in the third quarter up by 7% and 9% respectively compared to a year ago.

Ishaan Malhi, CEO of online mortgage broker Trussle, said: “House price growth may have slowed but it's still creeping up, showing that the housing market is standing up well in the face of an uncertain economic outlook.

“This is partly down to the ongoing supply shortage, an issue that featured prominently in the Chancellor’s Autumn Statement last month. At the same time, rock-bottom mortgage rates are also pushing up prices by fuelling demand.”

“For first-time buyers and those looking to remortgage, now is the time to take advantage of favourable interest rates while they’re around. Locking in a good fixed term mortgage rate now could save thousands of pounds in the long run.”