Month on month they decreased by 0.2% but are 9% higher in the three months to November than in the same three months than a year ago, taking the average price to £204,552, the data from the Halifax shows.
Martin Ellis, Halifax housing economist, pointed out that the annual rate of price growth eased from 9.7% in October but said solid economic growth, rising real earnings and falls in already very low mortgage rates have combined to stimulate housing demand this year.
He explained that the increasingly acute imbalance between supply and demand is causing prices to rise at a robust pace and this is a situation that is unlikely to reverse significantly in the short term.
Neal Hudson, associate director at Savills research, pointed out that monthly figures can be quite volatile so it is always best to look at the longer term trends. ‘These show continued annual price growth in excess of underlying incomes, driven primarily by increased mortgage lending into the sector but compounded by relatively low levels of stock available,’ he said.
‘Short term indicators have weakened, with house price growth on a three month basis slowing, but we may well see these seasonally adjusted figures revised in coming months,’ he added.
He also pointed out that the figures reflect a regular pattern in house price growth emerging over the last couple of years, with strong price growth in the first six months followed by static prices in the final six months on the year.
‘Savills expects this trend to continue next year with a national house price forecast of 5% and so the seasonally adjusted growth currently reported may well be revised upwards in coming months,’ said Hudson.
Mark Posniak, managing director of Dragonfly Property Finance, also expects prices to keep rising in 2016 due to the imbalance between supply and demand. ‘The worry is that there is no concerted long term strategy for tackling supply. The lack of properties being put up for sale remains an enigma given that mortgage rates and the cost of living are so low and consumer confidence, overall, is high,’ he said.
‘Talk of imminent interest rate rises has been going on for a year or two now and it may be that people want more clarity on the speed of rate rises before they commit to a purchase. It's hard to believe that 2016 will see any change in the ongoing narrative of low supply, strong demand and rising prices,’ he explained.
According to Jonathan Hopper, managing director of the buying agents Garrington Property Finders, while a halving of the pace of quarter on quarter price rises might appear dramatic given the market’s consistent growth this year, it is the first time in 2015 that quarterly price rises have dipped below 2%.
‘There is plenty of momentum left at almost all price points in the market,’ he said, adding that sales of homes of over £1 million are still sluggish, and transactions in the £1.5 million to £2 million price bracket even more so.
‘A year on from the surprise rise in Stamp Duty on high value homes, demand is so weak that supply is beginning to dip as would be sellers hold off and the market is still stuck in limbo. But for most of the property market it’s the opposite and surging demand is outstripping supply and the collision of these two forces is inevitably driving prices upwards,’ he added.
‘While many house hunters put their search on hold in December, the easing of the pressure is likely to be temporary. With consumer prices still falling, buyer confidence high and the cost of borrowing likely to stay low well into 2016, demand will continue to be stoked in the New Year. With the lack of supply endemic in some areas, such strong demand will continue to drive up average prices at the start of 2016,’ he concluded.
