Underlying trend shows house price quarterly slowdown in UK

UK house prices in the third quarter of 2015 were 8.6% higher than in the same three months a year earlier and up 2% quarter on quarter, according to the latest residential index.

However, the quarterly rate of growth fell from August’s 3%, to its lowest since May and the annual figure was lower than the 9% recorded in August, the date from leading lender The Halifax shows.

The index report says that the movements are in line with the average so far this year and points out that monthly data can be volatile and the quarter on quarter change is a more reliable indicator of the underlying trend.

Separate research shows that there has been a 60% increase in the average price of a flat over the past 10 years, significantly higher than the 38% rise for all residential properties. Detached homes with growth of 21% and bungalows at 28% have recorded the smallest rises over the last decade.

‘Housing demand has been strengthening recently, underpinned by economic growth, rising real earnings and very low mortgage rates,’ said Martin Ellis, Halifax housing economist.

‘Increasing demand is combining with very low supply to drive robust underlying house price growth. There is little reason to expect any fundamental shift in the key market drivers over the coming months,’ he added.