House price growth at lowest levels since 2013
The latest housing statistics from Halifax have revealed that house prices in the last three months were up 1.7% against the previous three months. This compared to the 2.3% quarterly rate of change in January, and was the lowest since November 2016. Between January and February, house prices saw a 0.1% increase following January’s 1.1% decline. According to Halifax, mortgage affordability is significantly better than a decade ago, up by 18% since 2007. Typical mortgage payments for new borrowers (both first-time buyers and home movers) at the historic average loan to value ratio stood at 30% of earnings in 2016 Quarter 4 compared to the peak of 48% in 2007 Quarter 3.
The volume of total UK home sales has seen a recent upward trend. Transaction numbers in January were 4.9% higher than in December 2016. At 104,820, sales were the highest since March 2016, and sales in January 2017 were almost identical to those in January 2016.
Supply remains very low. The number of properties coming on to the market for sale fell in January, this indicator has now failed to increase for 11 successive months. As a result, average stock levels on estate agents’ books remain close to historic lows.
House Building fell by 1% in 2016. New housing completions in England were estimated at 35,980 (seasonally adjusted) in the final three months of 2016. This was 4% lower than in the previous quarter, and 2% below their level in the same quarter in 2015. Overall, completions in 2016 were 1% lower than in 2015. Completions were 43% above their recent trough in the first quarter of 2013, but remain 26% below their recent peak in the first three months of 2007.
The annual rate of house price growth has nearly halved over the past 11 months. A sustained period of house price growth in excess of pay rises has made it increasingly difficult for many to purchase a home. This development, together with signs of reduced momentum in the jobs market and squeezed consumer spending power, is expected to curb house price growth during 2017.”