Monthly house prices update- October 2016
by Housesimple on 10th October 2016
In two recent studies, Nationwide revealed that the latest house prices show signs of slowing demand, while Halifax focused on the age divide between first time buyers across the country. Here we take a look at what these findings suggest for the future.
House sale prices have risen by just 0.3% in September, figures from Nationwide show, as annual house price growth slowed from 5.6% in August to 5.3%. According to Nationwide's Chief Economist, Robert Gardener, the main reason for the stagnation is that the number of properties on the market are still close to all-time lows.
The rate at which new homes are being built in England also remains a concern. In the year to Q2 2016, 139,000 new houses were completed. That’s 15% below the average rate before the financial crisis and 38% below the 225,000 that predictions suggest the nation needs.
With demand continuing to outstrip supply, albeit slowly, and with interest rates continuing at record lows, house prices have the potential to continue their growth: but uncertainty over the economy, and particularly over Brexit, makes accurate predictions tricky.
Homeowners should also be aware of the ongoing divide in property value between the various UK regions. Regions in the South East of England again registered the strongest price increases, with house prices rising by 9.6% in the outer metropolitan area and 7.1% in London. Whereas in Scotland, growth was limited to just 2%, and in Wales and the North of England property prices registered small declines of 0.5% and 0.2% respectively.
Meanwhile, a Halifax study has shown that the UK’s youngest first-time buyers are in Carlisle and South Wales while the oldest, who are seven years their senior, are found in Slough and the London boroughs of Barnet and Ealing. Unsurprisingly, there’s a clear correlation between the average age of first-time buyers and average house prices, suggesting that price continues to be an issue that prevents many in the South East from getting onto the property ladder.
In better news for aspiring homeowners in the South East, Nationwide's study suggests that house builders have been focussing their efforts on areas with high prices, high demand and low stock.