House price growth in the UK is steady, data from latest lender index suggests

House prices in the UK were 1.8% higher in the third quarter of 2018 than in the previous three months and 2.5% higher than the same period in 2017, the latest lender property index shows.

The data from the Halifax also shows that the annual growth rate slowed from the 3.7% recorded in August and on a monthly basis, house prices fell by 1.4% in September, the second fall in a row, taking the average price to £225,995.

Russell Galley, managing director of the Halifax, pointed out that the figures show that house price growth is stable. ‘This is set amongst mortgage approvals and completed house sales remaining broadly unchanged, although a gradual pickup in wage growth has helped to support household finances,’ he said.

‘The annual rate of growth is near the top of our forecast range of zero to 3% for 2018, as a low supply of new homes and existing properties for sale, combined with historically low mortgage rates and a high employment rate, continue to support house prices,’ he added.

Russell Quirk, chief executive of Emoov, explained that rapid growth in August meant that the September month on month figure was always going to be lower. ‘The market is by no means excelling, but we are certainly in a stronger position than we were last year as a steady stream of buyer activity has seen the market keep plodding on,’ he said.

‘The issue isn’t due to appetite, mortgage approvals are increasing, sales are completing, but with stock levels at their lowest in a decade, we need more supply. While price growth may remain erratic month to month until greater political stability prevails, this lack of stock, coupled with the fact that the construction of new build developments is falling, will see prices continue to creep up in the mid-term,’ he added.

According to Andy Soloman, growth experts at Yomdel, the market is likely to be flat in the coming months ahead of Brexit next March. ‘Consumer confidence isn’t as prevalent across the property market as it is in other areas of the economy. The market will continue to lose altitude until the government gets its house in order over Brexit,’ he said.

‘In the short term, monthly price growth should remain static as we enter the time of year when other areas of the economy, such as the retail sector, receive a welcome boost in consumer spending, while the property market takes a back seat,’ he explained.

But there are still significant barriers for first time buyers, according to Steve Seal, director of sales and marketing at Bluestone Mortgages. ‘Whilst the average growth of house prices remains steady, this doesn’t necessarily mean all doors are open for aspiring home owners. If anything, there are still significant barriers when it comes to securing funding,’ he said.

‘Lifestyle and financial habits are changing and it’s unfair that some potential buyers are turned away for not fitting an outdated computer scoring system. A missed phone or credit bill, or unforeseen costs for an accident shouldn’t mean you are barred from home ownership,’ he pointed out.

‘These customers, instead, need a personalised underwriting experience that ensures the nature of their situation is fully understood. It’s vital that specialist lenders continue to find the best solutions for all of their clients, based on a rounded and fair view of their individual financial situation,’ he added.