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Low supply continues to fuel house price rises

Feb 23, 2018

According to the Halifax House Price index, the price of UK houses increased in the three months September–November 2017 by 2.4% compared with the previous three months and by 3.9% compared with the same three months in 2016. The average price of a home in the UK is now quoted as £226,821, 3.2% higher than in January.

Russell Galley, Managing Director, Halifax Community Bank, said: The imbalance between supply and demand continues to support house prices, which doesn’t look like changing in the near future. 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. We do expect the government's first-time buyer Stamp Duty changes to provide some stimulus to demand, particularly in London and the South East where the impact is greatest.”

In October last year home sales grew by a modest 2% to 105,260, the highest level in 2017. Monthly sales remained above 100,000 throughout 2017. Mortgage approvals, however, were down towards the end of 2017 having reached a high point in July.

Alex Gosling, CEO of online estate agent, commented: "These figures suggest a housing market in remarkably good health, but low supply levels continue to distort the real picture. The property market's not on its knees by any means, but it needs a spark from somewhere. Buyers are viewing, but when the same properties are coming up on searches every week, and very little new stock is being listed, there's not a great deal of enthusiasm to take it beyond the viewing stage. Hopefully the Chancellor's Budget decision to cut Stamp Duty for first-time buyers will give the bottom end of the market the energy boost it desperately needs. But if homeowners further up the chain aren't selling, there won't be enough affordable properties coming onto the market. And the government's plan to build more affordable homes isn't going to solve the supply crisis today. The property market will be glad to see the back of 2017 - a year when it has had to cope with Article 50 being invoked, a calamitous General Election, a rate rise and a constant stream of negative Brexit news.”

Photo: The imbalance between supply and demand continues to support house prices.

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