House prices rise by 8.6% in September as supply remains weak

6th October 2015


House prices rose by 8.6% in the three months to September  to £202,859, compared to the same period last year, the latest figures from Halifax show.

This was lower than August’s 9%, but in line with the average so far this year.

The quarterly rate of change fell from August’s 3%, to 2.1%, which was the  lowest since May.

September’s average house price was below August’s figure of £204,722.

Separate research showed that there has been a 60% increase in the average price of a flat over the past ten years; significantly higher than the 38% rise for all residential properties

Home sales increased by 3% between July and August, to 106,480. This was the highest monthly total since February 2014 when sales reached 109,030. Sales in the three months to August were 6.5% higher than in the preceding three months.

The volume of mortgage approvals for house purchases – a leading indicator of completed house sales – increased by 3% in August to the highest level since January 2014. Approvals in the three months to August were 6% higher than in the preceding three months (March-May) and 6% higher than in the same three months last year.

New instructions by home sellers declined in August for the seventh consecutive month. This helped to push down the stock of homes available for sale again in August, reducing it to a new record low.

Martin Ellis, Halifax housing economist, says:”House prices in the three months to September were 2.0% higher than in the previous quarter. This measure of the underlying rate of house price fell from last month’s 3.0%, to its lowest since May. The annual rate eased from 9.0% to 8.6%.

“Housing demand has been strengthening recently, underpinned by economic growth, rising real earnings and very low mortgage rates. Increasing demand is combining with very low supply to drive robust underlying house price growth. There is little reason to expect any fundamental shift in the key market drivers over the coming months.”

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