The annual rate of growth has continued to ease, slowing from 5.8% in September to 5.2% in October, according to the latest Halifax House Price Index. There was a month on month increase of 1.4% however, bringing the average price to £217,411.
The annual rate has nearly halved from its peak of 10% in March of this year but, the report says, prices have stabilised over recent months following the spike in activity earlier this year as buyers rushed to beat the April deadline ahead of changes to stamp duty.
Halifax’s chief housing economist, Martin Ellis, says the slowdown is “largely due to mounting affordability pressures, which have increasingly constrained housing demand”. He suggests that growth may ease further over the coming months, but price levels will be supported by low mortgage rates and a shortage of property stock.
Nationwide’s recent index report put the annual rate of growth at 4.6%, but highlights the fact that over the last three years prices have increased by 20% while wages have risen by 6%. “As a result” says chief economist Robert Gardner, “the typical house now costs six times average earnings, up from 5.3 times earnings in 2013”.
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Annual house price growth eases