There was a surprise rise in UK home prices in October, despite the slowdown in the housing market in recent months, according to new figures released by the Halifax this morning.
The findings from a new survey conducted by the mortgage lender reveal that the average price of a residential property rose by 1.4% in October compared with an upwardly revised 0.3% increase in September.
In the three months to October, home prices were 5.2% higher compared with the corresponding period a year ago, which is “encouraging news for investors”, according to Rob Weaver, director of investments at property crowdfunding platform Property Partner.
He said: “Despite a clear softening in house price growth due to questions over affordability and demand from investors, the dust has seemingly started to settle.
“The market suffered an initial wobble post-Brexit but is proving resilient, mostly the result of the severe supply shortage that’s helping to prop up prices.”
Weaver believes that the existing uncertainty in the housing market which has contributed to the slowdown in activity levels in recent months has more to do with the introduction of the 3% stamp duty surcharge in April for those acquiring additional homes and buy-to-let property investments, rather than because of the outcome of the EU referendum.
He continued: “The finger of blame for buyer uncertainty is pointing directly at the stamp duty hike in April but demand seems to have also steadied. Mortgage approval levels, albeit down on a year ago, appear to have found their balance.
“Looking ahead, continued historically low borrowing rates and lack of housing stock, are likely to support prices for at least the short to medium-term.”
Jonathan Hopper (left), managing director of Garrington Property Finders, shares Weaver’s view that cheap borrowing levels and a general lack of homes on the market will continue to prop up home prices, but he believes that it remains a buyer’s market – “with sellers increasingly willing to trim prices”.
He said: “Reassured by rock bottom interest rates, a robust labour market and an economy that continues to grow, many buyers who sat on the fence in the run-up to the referendum have given up trying to second guess the Brexit saga - and are instead focusing on the market's strong fundamentals.
“Prices are being supported in several areas by a chronic shortage of supply, but it remains a buyer’s market – with sellers increasingly willing to trim prices.
“However the shift in the balance of power from seller to buyer has prompted pragmatism rather than panic among vendors – which has so far prevented wholesale price cutting.
“Last week’s High Court judgment confirmed that the Brexit process will be neither quick nor easy, but the property market’s robust progress is a reassuring sign of a return to business as usual.”