House prices rise at fastest rate since start of year

House prices rise at fastest rate since start of year

House prices have grown at the highest quarterly rate since January as a lack of supply continues to hold back the market, according to Halifax.

The lender's November house price index showed prices rose 2.4 per cent on a quarterly basis – up from 2.3 per cent the previous month.

Prices also crept up on a monthly basis, increasing from 0.3 per cent to 0.5 per cent, but the annual rate of growth slipped from 4.5 per cent to 3.9 per cent.

The average house price in the UK is now £226,821, according to Halifax.

Russell Galley, managing director of 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."

HMRC data showed property transactions totalled 105,260 in October – the highest level since March 2016.

Lenders began raising their interest rates from the end of September, in anticipation of a rise in the Bank of England’s base rate, which came on 2 November.

According to the latest data from the Bank, there was a drop in the number of mortgage approvals for house purchase in October, but remortgage approvals jumped to a nine-year high.

The latest data from the Royal Institution of Chartered Surveyors (Rics) showed a sharp decline in the supply of homes for sale and a weakening of new buyer enquiries.

And Zoopla has revealed homeowners were selling their homes at almost 4 per cent less than the asking price in September.

Chancellor Philip Hammond used the Autumn Budget to scrap stamp duty for the majority of first-time buyers in a bid to stimulate the market.

Mr Galley added: “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.”

Alex Gosling, chief executive of online estate agents, said market activity had dropped off earlier than normal this year.

He said: "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.”

Jeremy Leaf, north London estate agent and a former Rics residential chairman, said: “Once again, we are seeing a fairly familiar pattern emerging with housing market resilience and modest but steady price growth supported by a shortage of stock.