Wind taken out of UK housing market as prices dip –

6 months ago Comments Off on Wind taken out of UK housing market as prices dip –

Halifax house price data is more volatile than other indices, but still shows a strong upward trend. In the three months to April, prices were up 9.2pc on the same three months a year earlier, and the average house price is £212,321.

Samuel Tombs, economist at Pantheon Macroeconomics, said that “the surge in March likely partly reflected some buy-to-let and second home buyers paying a premium to complete transactions before the increase in stamp duty – a property transfer tax – on such purchases on April 1.

“Price growth is set to remain robust, as recent falls in mortgage rates encourage homebuyers to take out larger loans, and banks continue to relax lending criteria.

“Meanwhile, the recent stalling of the recovery in housebuilding, as well as high moving costs and elevated house price expectations among homeowners, suggest that supply will remain scarce.

“Brexit fears might subdue prime London property prices, but previous bouts of political uncertainty have seldom depressed the whole market. As such, we expect price growth to remain strong, bolstering the case for higher interest rates to prevent household debts eventually reaching unsustainable levels.”

He added that the price growth was in line with the expectations of chartered surveyors at Rics, who expect a 2pc rise in the second quarter of 2016.

Wind taken out of UK housing market as prices dip –