Where are House Prices Going?


Where are House Prices Going?

This is the eternal question, of course the answer will vary depending on what part of the country you are in, what type of property and other more local factors.

According to figures from Nationwide Building Society’s House Price Index the trends we are seeing presently are that London’s prices have declined by 0.7% in the third quarter of 2017 (July to September) and are only up by 1.2% on the previous year. Across the UK price growth has slowed to just 2% in the year to September 2017. Compared to average of the past 2 years at 4.5%!

The September RICS survey have suggested that demand and sale “slipped deeper into negative territory, with this subdued picture anticipated to persist over the coming months.” There are some signs of a cooling market, such as: the lowest level of mortgage approvals for three months was recorded in September at just 66,232. Also, a reduction in housing transactions by 1.8% between August and September 2017.

Experts are concerned that the decline seen in London may well lead to a “ripple effect emanating from London, and in time spreading out to other regions” (Sean Holly, Cambridge University). For the younger generation this might be a welcome break, if house prices decline it will allow for a correction to intergenerational inequality and could redistribute wealth to the young. However the worry is that when we have seen house price corrections in the past they have been followed by a recession.

In this part of the country we have a relatively healthy market at present, if this affect is seen it will be likely to be a flattening of prices rather than a decline, at least in the immediate future.