Housing market set to slow in coming months

Housing market set to slow in coming months
 Credit: Jason Alden/Bloomberg

The average house price reached a record high of £250,457 in October, but the market is set to slow in the coming months, according to Halifax.

The Halifax House Price Index, published last week (November 6) showed house prices in the latest quarter (August to October) were 4 per cent higher than in the preceding three months.

House prices in October were also 7.5 per cent higher than in the same month last year, the strongest growth since June 2016, according to Halifax.

But month-on-month price growth “slowed considerably”, down to 0.3 per cent, compared with 1.5 per cent in September.

Russell Galley, managing director at Halifax, said: “While government support measures have undoubtedly helped to delay the expected downturn in the housing market, they will not continue indefinitely and, as we move through autumn and into winter, the macroeconomic landscape in the UK remains highly uncertain.

“Though the renewed lockdown is set to be less restrictive than earlier this year, it bears out that the country’s struggle with Covid-19 is far from over. With a number of clear headwinds facing the housing market, we expect to see greater downward pressure on house prices as we move into 2021.”

Jonathan Hopper, CEO of Garrington Property Finders, agreed the rise in house prices “can’t last”.

Mr Hopper said: “The sharp slowdown in the monthly rate of price growth suggests several regional markets are approaching a high-water mark.”

Likewise David Westgate, group chief executive at Andrews Property Group, described the current market as “in cool down mode”.

Mr Westgate said: “That the furlough scheme has been extended until the end of March will provide a degree of support to prices but you only have to read the papers to see the rise in the number of unemployed and businesses folding.” 

He added: “Lenders have grown increasingly conservative in recent months and anyone with a small deposit now has a real struggle on their hands.”

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