House prices in the UK in the three months to August increased by 3.7%, compared to the same period a year earlier, according to Halifax’s recently published House Price Index for August 2018.
Despite the annual increase, looking at property price changes on a monthly basis, prices increased by just 0.1%, taking the average asking price for a property in the UK to £229,958. The rise means that house prices in this quarter are 1.9% higher than in the previous quarter.
Mortgage approval figures remained steady between June and July, with figures from the Bank of England (BoE) revealing that the number of approvals fell by 0.9% to 64,768. Although this is a fall in the number, the figure is almost exactly at the monthly average for the previous 12 month period.
However, the number of completed of UK home sales remained near the monthly average for the past year, though, on monthly basis, sales fell by 0.8% between June and July to 99,270. Despite this, statistics from HMRC found that in the three months to July sales increased by 2.1% from the previous three months.
Commenting on the findings, Halifax managing director Russell Galley said: “House prices picked up in August, with the annual rate of growth rising from 3.3% in July to 3.7%. With the average house price now £229,958 prices in the three months to August were also 1.9% higher than in the previous quarter.
“While the pace of employment growth has recently slowed, a low unemployment rate and a gradual pickup in wage growth are helping to support household finances. This has been accompanied by interest rates still remaining at a historically low rate and a stable, yet constrained, supply of new homes onto the market further supporting house prices.”
Bluestone Mortgages director of sales and marketing Steve Seal has attributed the “steady rise” in house prices to the lack of property stock, which continues to “stifle movement” in the market, whilst driving up prices. However, Seal acknowledged that consumer confidence is being kept “relatively steady” due to the work of the government help to buy and shared ownership schemes.
“Despite this, not everyone is able to gain access to the support that they need. Rising living costs continue to challenge the affordability of those unable to access mainstream lending, such as the self-employed. In order to make mortgage applications achievable for all consumers, resources must be made available to provide extra financial and holistic support. Specialist lenders can help, recognising when factors are outside of an individual’s control and offering the tailored solutions that these borrowers deserve to get onto the property ladder,” he added.
Alex Depledge, founder and CEO of resi.co.uk, echoed Seal’s comments, stating that property prices remain high, causing the market to continue being driven by a lack of supply, which is further fuelled by rising construction costs, concerns over a “diminishing workforce” following Brexit and uncertainty around how the deal will impact the property market.
Depledge concluded that innovation in the sector, “beginning with the application of technology” is “desperately needed”.
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