UK House Prices
Russell Galley, Managing Director at Halifax, said: “Average house prices rose by 4% over 2019, at the top of our predicted range of 2% to 4% growth for the year. This was driven by a monthly gain of 1.7% in December which was the biggest monthly increase of 2019, pushing up the year-on-year growth rate and reflecting that December 2018 was a particularly weak month.”
“Looking ahead, we expect uncertainty in the economy to ease somewhat in 2020, which should see transaction volumes increase and further price growth made possible by an improvement in households’ real incomes.”
“Longer-term issues such as the shortage of homes for sale and low levels of house-building will continue to limit supply, while the ongoing challenges faced by prospective buyers in raising deposits will serve to constrain demand. As a result, we expect a modest pace of gains to continue into next year.”
HMRC Monthly property transactions data shows a rise in UK home sales in November. UK seasonally adjusted residential transactions in November were 102,050 – up by 3.2% from October and the highest level since August 2017. Year-on-year, transactions in November 2019 were approximately 1.9% higher than November 2018 (0.2% lower on a non-seasonally adjusted basis). (Source: HMRC, seasonally-adjusted figures)
Mortgage approvals have risen slightly from October. Bank of England figures show that the number of mortgages approved to finance house purchases were 64,994 in November – this represents a 0.5% month on month rise, following a fall of 1.8% in October. Year on year growth is 1.4%. (Source: Bank of England, seasonally-adjusted figures)
The latest set of results (November 2019) for the RICS Residential Market Survey have shown new buyer enquiries slipping for the third consecutive report with a net balance of -9% of respondents citing a decline. The pace of decline has however eased compared to the last two months (-15% and -16%). Meanwhile, newly agreed sales net balance continued to signal a modest fall in transactions. Again, the pace of decline (in net balance terms) eased in comparison to the last two months with the latest reading moving to -8% from -18% and -27% previously. Sales expectations net balance has edged up to +11% (from 5% in October). (Source: Royal Institution of Chartered Surveyors’ (RICS) monthly report).
Responding to the Halifax house price index, The Guardian quoted Hansen Lu, a property economist at the consultancy Capital Economics, who said: “Prices are still very high relative to incomes and interest rates are close to their floor – so the fundamentals leave little room for a sustained surge in house prices. Indeed, we expect house price growth to end 2020 and 2021 at below 2% per year.”
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