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In another sign that UK property price growth is slowing the latest index figures show that they increased by just 0.6% in September to an average of £187,188. The index from the Halifax also shows that inn the three months to September they were 2.7% higher than in the preceding three months. However, this was the second successive decline in the quarterly rate. Annually, prices were 9.6% higher in the three months to September than in the same three months last year. This was similar to the 9.7% recorded in August and below July’s 10.2%. ‘The recent rapid rise in house prices in some parts of the UK, earnings growth that remains below consumer price inflation and the possibility of an interest rate rise over the coming months, appear to have tempered housing demand,’ said Martin Ellis, Halifax housing economist. ‘This weakening in demand has led to a modest easing in both house price growth and sales. Annual house price inflation may have peaked around 10%. A moderation in growth looks likely during the remainder of 2014 and into next year as supply and demand become increasingly better balanced,’ he added. The Halifax report also points out that mortgage approvals for house purchases, a leading indicator of completed house sales, fell for the second consecutive month in August, to 64,200. According to seasonally adjusted figures from the Bank of England, approvals were 16% below their recent peak in January 2014 and only 1% higher than in August 2013. Also, the number of new buyer enquiries fell for the second consecutive month in August, according to the latest data. Market conditions, as measured by the ratio of house sales to the stock of unsold properties reported by the Royal Institution of Chartered Surveyor’s monthly survey loosened slightly in August as a result of lower sales. This suggests a better balance between supply and demand is materialising which, if sustained, would help to dampen the pace of house price growth. According to Jonathan Hudson of West End estate agent in London, Hudsons Property, the new figures are not a surprise. ‘House prices in London haven’t risen in the same period so whilst this shows growth nationally, one shouldn’t forget that the figures mainly represent property transactions which were agreed some time before. Therefore, it will be interesting to see how the London slow down affects the UK market over the next quarter,’ he said. ‘Prices in the three months to September being 9.6% higher than in the same three months a year earlier, is again not surprising given the huge rises we have seen in the UK, especially over the last 10 months in areas which haven’t seen growth since 2008,’he pointed out. ‘The 0.6% increase between August and September shows transactions that were agreed sometimes months before and completed in this time frame,’ he added. Continue reading →
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