UK Housing Market Data Indicates Slower Growth
The latest house price figures from Halifax are in line with the cooling off measures showing up elsewhere in the overall general data of the UK housing market. A slowdown is occurring. House prices during the last three months to November were 0.7% higher than during the three months prior. The rate of increase is slightly off from the 0.9% figure of one month ago. The figures paint a much different picture compared to the same time last year, when prices in the three months to November were more than 8% lower than this year. This is a clear indicator of where the market was and which direction it is heading as far as ongoing recovery is concerned.
According to Halifax, house prices are now growing at the slowest rate since the second month of the year. Many close to the housing market see this as a natural cyclical decrease in activity as we enter the winter months. Others however see this as a possible bursting of a housing market bubble, adding to the monumental task of returning the market to more normal times.
In addition to the slowdown taking place with original mortgage lending, remortgages are at subdued levels as well. Some within the UK housing market see remortgage competition heating up in the spring as talk of a possible change in the base rate will surely pop up in the headlines again.
Martin Ellis of Halifax, commented on supply and demand within the UK housing market, saying: “Receding buyer interest combined with a revival in private housing completions has brought supply and demand into better balance. These factors have in turn contributed to the easing in house price growth since the summer.
“But housing demand continues to be supported by a strengthening economy, rising employment levels, still low mortgage rates and the first gain in real earnings for several years.”
Ellis added: “We expect a further moderation in house price growth over the next year with prices nationally expected to increase in a range of 3% to 5% in 2015. The prospect of higher interest rates at some point in the year and the deterioration in affordability over the past year are expected to be key factors curbing housing demand.”