A shortage of homes hitting the market is continuing to prop up record-breaking UK house prices, which were up by 4 per cent in the three months to September, compared to the same period last year, according to lender Halifax.
That’s an acceleration from the gain of 2.6 per cent seen in August and leaves the average house price at £225,109, the highest on record. Prices were up by 1.4 per cent compared to the three months to June – the fastest pick-up since February.
Russell Galley, at Halifax Community Bank said:
UK house prices continue to be supported by an ongoing shortage of properties for sale and solid growth in full-time employment. However, increasing pressure on spending power and continuing affordability concerns may well dampen buyer demand. There has been recent speculation on the possibility of a rise in the Bank of England base rate. We do not anticipate this will have a significant effect on transaction volumes.
The number of new homes for sale remained close to an all-time low, Halifax added.
Pantheon Macroeconomics points out that disparities between the clutch of different measures of UK house prices is unhelpful:
The sudden surge in Halifax’s measure of house prices—up 3% over the last three months alone—is impossible to reconcile with all the other housing market evidence. Halifax’s measure is the most volatile of all the indices we track; the standard deviation of month-to-month changes over the last four years has been two and three times higher than for the official and Nationwide indices, respectively. Other surveys show that the pipeline of demand is soft.
(Final chart: Pantheon. Others from Halifax.)