MortgagesDec 14 2015

November house price dip smallest since 2011

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November house price dip smallest since 2011

November’s house price dip of 1.3 per cent - or down £3,977 - is much less marked than usual, according to Rightmove, and is the smallest seen at this time of year since 2011.

The latest house price index stated this indicates a positive underlying outlook for the year ahead among homeowners.

Its research suggested that 85 per cent of homeowners expect their financial situation to get better (41 per cent) or stay the same (44 per cent) over the next year, apparently unfazed by the risk of higher interest rates.

Seven in 10 homeowners think house prices will be more expensive in the next 12 months, despite an average increase of 6.2 per cent - or £16,969 - increase in the last year.

Rightmove’s director and housing market analyst Miles Shipside, said new-to-the-market sellers have dropped their asking prices at this time of year for the last eight years, with an average drop of 1.9 per cent over the last five years.

“Buoyant market conditions and a confident outlook for 2016 mean that the reduction, while no-doubt welcome to hard-pressed buyers, is the most Scrooge-like since 2011.

“It is likely to be a short-lived respite as the combination of high confidence and low interest rates is a recipe for higher prices next year.”

Mr Shipside continued that long-term low interest rates are typically a trigger for activity and price rises in the property market while other parts of the economy are less susceptible to such an incentive.

“The spur of cheap money helps buyers to pay the asking price or outbid the competition for their ideal home. It all fuels demand for property as evidenced by Rightmove traffic up in October by 23 per cent year-on-year.”

Jeremy Duncombe, director of Legal & General’s Mortgage Club, said the nominal decrease in house prices from last month, compared to more severe drops seen in previous years, is indicative of the scale of undersupply in today’s market.