UK housing price growth slowed at end of 2014, index data confirms

Taylor Scott International News

House prices in the UK in the last three months of 2014 were 0.3% higher than in the previous quarter and are expected to increase by up to 5% in 2015, according to the latest index report. A monthly rise of 0.9% took the average price of a home to £188,858, the data from the Halifax shows. However, growth is clearly slowing. The quarterly rate of increase declined for the fifth consecutive month and was the lowest since November 2012 when it was 0.3%. Prices in the three months to December were 7.8% higher than in the same three months a year earlier and based on this annual house price growth has fallen from a peak of 10.2% in July and is now at its lowest rate since January 2014 when it was 7.3%. The Halifax expects a further moderation in house price growth over the coming year. House prices nationally are predicted to increase in a range of 3% to 5% in 2015. The index points out that home sales at 98,490 in November were below 100,000 for the first time since November 2013.Overall, sales in the three months to November were 1% lower than in the previous three months. Despite this recent modest decline, sales during September to November were 5% higher than in the same period last year. ‘The deterioration in housing affordability as a result of rising house prices, earnings growth that has been consistently below consumer price inflation until very recently and speculation of an interest rate rise, have combined to temper housing demand since the summer. The weakening in housing demand has led to a reduction in both price growth and sales in recent months,’ said Halifax housing economist Martin Ellis. ‘We expect a further moderation in house price growth over the coming year with prices nationally predicted to increase in a range of 3 to 5% in 2015. Housing demand, however, should continue to be supported by a growing economy, rising employment levels, still low mortgage rates and the first gain in real earnings for several years,’ he added. Peter Williams, executive director of the Intermediary Mortgage Lenders Association (IMLA), said that the falling rate of house price increases at the end of 2014 might suggest greater market stability. 'But this should not disguise the need for ground breaking action on housing policy in the upcoming election. Declining affordability has tempered demand and the housing market in its present state is still a long way from supporting the nation’s home owning ambitions,' he pointed out. 'Housing policy is in need of fundamental reform rather than short term voter appeasement that has brought a host of temporary measures and tinkering at the edges without a long term plan. Successive governments have failed to address changing housing needs and left us on a downwards trajectory that will see owner occupation drop to 59% by 2020 if current trends continue,' he explained. … Continue reading →

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