UK house price growth weaker than forecast in year to September
Britain’s house price growth remained steady at 7.7 per cent in the year to September, according to official figures, despite expectations that they would nudge up more than 8 per cent. The latest figures are in line with a 7.7 per cent rise for the year to August, although August’s growth had originally been estimated at a more robust 8.4 per cent. Economists had expected September’s data to show a stronger increase of 8.1 per cent.
Data on the UK housing market has been mixed since the Brexit referendum but has generally pointed to softening growth since the first few months of 2016. While a number of estate agents and housebuilders reported greater uncertainty in the market following Britain’s vote to leave the EU, other factors are also at play, including tax changes for buy-to-let investors and second home buyers which came into force in April. The changes had sparked a rush to avoid high stamp duty in the first few months of the year.
According to the Office for National Statistics’ house price index, price growth peaked at 9.3 per cent this year in June.
A number of housebuilders have reported a recovery in confidence among homebuyers since an initial knock in the immediate aftermath of the referendum. Crest Nicholson said this morning that buyers are “largely returning to the market, as high employment, good mortgage access and low interest rates continue to make this a very good time to buy a home”.
Economists have also pointed to a lack of supply as another factor behind house prices remaining resilient.
House price data in the UK is always accompanied by the caveat there is a sometimes lengthy lag between offers being accepted and legal completions.
According to Rightmove, the property search website, average asking prices fell 1.1 per cent in November, having grown in September and October.