New figures from Halifax have indicated to Simon Morris that the growth rate of average UK house prices increased in the year to October 2015.
It’s quite clear that the UK housing market has been growing for some time. The Office for National Statistics’ August 2015 House Price Index suggested that average UK house prices expanded 5.2% in the 12 months to August, unchanged from the rate annual of growth to July 2015.
Meanwhile statistics from Halifax indicate that average UK house prices expanded 8.6% in the year to the ninth month of 2015. The BBC reported that the bank has reported its house price figures for October, which are more optimistic than those released by building society Nationwide.
The building society revealed that average UK house prices expanded at an annual rate of 3.9% in October, and that property values were up 6% when compared with September 2015. However Halifax’s figures suggest that average UK house values increased 9.7% in the year to October 2015.
Broken down, the Halifax numbers show that average UK residential property prices rose at a rate of 1.1% in October itself. This is a marked turnaround from September, when they declined 0.9%. Therefore according to Halifax the average UK house price has now climbed to a record high of £205,240 – somewhat more than Nationwide’s figure of £196,807.
Halifax housing economist Martin Ellis commented on the release of the bank’s latest residential property figures. He said: “Improving economic conditions and household finances, together with sustained low mortgage rates, have boosted housing demand during 2015.
“Strengthening demand is filtering through into higher sales levels, although the ongoing shortage of supply is acting as a significant constraint on activity.” Ellis went on to add that demand for residential property was likely to outpace the UK’s supply of housing stock over the coming months, and that this would maintain “maintaining upward pressure on house prices.”
The Simon Morris blog has extensively reported on the UK’s housing shortage; we don’t have enough residential property to meet demand, and this is having a profound effect on the market. The strong demand for housing, coupled with a deep lack of supply that shows no sign of letting up any time soon, could ensure average UK house prices maintain their upwards trajectory.