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According to Halifax, house price growth has hit a new six-year low.
In October, the average price of a home was just 0.9 per cent higher than last year.
So, is there a property price slump on the horizon, and what about the impact of the December election?
The Halifax figures don’t show us the full picture. Falling prices are identified in the South East, east of England and London. Prices in London dropped 1.7 per cent in the year time period up until this September - the biggest decline in a decade.
Coutts also discovered the average reduction on asking prices in the capital between July and September was at a two-year high, at 10.3 per cent.
But prices are up elsewhere across the country. The Halifax research showed that The North West jumped to 6.1 and 4.2 per cent respectively.
But while prices are falling in London, sales are also picking up. According to LonRes, in central London house prices have dropped the most but transactions between July and September were up 14 per cent on the same period last year.
According to Frank Knight, there were 103,220 sales in September across the UK - 6.3 per cent more than last September. Volumes are still down compared to previous years, but the numbers aren’t on a downward slope.
Zoopla says the average time it takes to sell a property is now at a three-year high across UK cities. But in Glasgow, Birmingham, Cardiff, Manchester, Sheffield, Liverpool and Newcastle, properties are selling more quickly now than in 2016, despite Brexit uncertainty.
Knight Frank’s data shows increases in sales volumes in the months following the elections in 2010, 2015 and 2017.
The time of year of those elections may be significant. Britain’s buying seasons are typically in spring and autumn, and previous elections have been held in the warmer months.
December is a traditionally quiet time for the market…Any significant bounce in activity is unlikely in the immediate aftermath of the election.
We believe the real significance lies in the housing policies of the winning party. A Conservative government would likely continue its current approach, while a Labour government might take steps to control house price growth, reform property taxation and introduce a large public housebuilding programme.
We also believe the uncertainty around Brexit is restricting growth in transactions, but it doesn’t have much of an effect on prices.
Falling mortgage rates have been the key driver of demand in the market but prices are now capped by wage price growth. Many say that while growth is slowing, house prices are still high in relation to incomes. If they get higher, regardless of Brexit or an election, people just can’t move.
Having a clearer view of the political landscape after the election may result in increased activity in the New Year, but low stock might be a hindrance.
Housebuilders are reacting to this downturn in price. According to Zoopla, in the three months from July to September, new home listings added in London fell by 24 per cent year on year.
But in the East and South East, there was a 40 per cent and 35 per cent increase in new home listings during the same period - two regions with the largest volumes of stock in the country. At the moment, the increased supply doesn’t match the demand and is putting downward pressure on prices. According to Zoopla, the East has the slowest selling times in the country.
Miss. Claire White
W. Why Media
E. claire@whymedia.com