Are House Prices Falling?
House prices dipped by 0.2% in November as the property market continued to show signs of slowing down. The typical cost of a home rose by only 1.4% between September and October to stand at £204,552, according to Halifax. That’s the smallest quarter-on-quarter increase since December 2014. But the annual rate at which prices are growing remained relatively robust, with values jumping 9% year-on-year. And affordability is becoming stretched, with the typical home now costing 5.31 times average earnings.
The drop in house prices during November follows a strong 1% rise in October and is likely to simply reflect monthly volatility, rather than the start of a downturn. The property market is still characterised by a strong mismatch between supply and demand, which is likely to continue to push prices higher going forward.
The fact that Halifax expects house prices to continue rising is bad news for first-time buyers, who may feel that the bottom rung of the property ladder keeps moving further out of their grasp. Neither is it welcome for those who want to trade up to a bigger home, as they may struggle to raise the additional mortgage they need. Meanwhile the shortage of property on the market means limited choice and fierce competition for anyone who wants to buy a home.
Are House Prices Falling?
