House Price Rebound Tipped to Stall on Hung Parliament
Image © Adobe Stock
Halifax have today reported a pickup in house prices across the UK, with the headline annual increase of 2.1% being the strongest increase since February.
In a sign that the market is experiencing increased levels of confidence, November saw a monthly increase of 1.0%.
According to Halifax, house prices are now up by £3,904 since the start of the year as buyers and sellers are responding to factors such as improved mortgage affordability and the limited supply of available properties.
The Halifax House Price Index is the UK's longest running monthly house price series with data covering the whole country going back to January 1983.
"While the latest numbers may suggest a Christmas miracle in the making, any real stability or growth is unlikely to return this side of the New Year given the upcoming election and the seasonal market slowdown that comes with Christmas," says Marc von Grundherr, Director of Benham and Reeves.
HMRC data shows UK seasonally adjusted residential transactions in October were 103,680 - up by 4.3% from September and the highest level since July 2017.
However, Bank of England data shows mortgage approvals have fallen slightly from September. Data shows the number of mortgages approved to finance house purchases were 64,602 in October – this represents a 1.8% month on month fall, following a slight rise of 0.3% in September. Year on year growth is -3.3%.
Halifax say they are forecasting house prices to make modest gains into next year.
However, the outlook for house prices in the UK does appear to remain linked to the outcome of the December 12 election.
Michael Stone, Founder and CEO of Stone Real Estate says "the real worst-case scenario" for the housing market "would be a hung parliament and yet more indecision."
Under such an outcome, "chaos and uncertainty would be very detrimental to a sector that is looking green around the gills having endured such conditions for some months already," says Stone.
The call comes as economists at Berenberg Bank say they are expecting a notable pickup in UK economic activity in 2020 should the Conservatives win a majority, as this would eradicate much of the political and economic uncertainty that has been weighing on the UK since the June 2016 EU referendum.
"A Conservative majority and the stability this should bring will act as a welcome adrenaline shot into the heart of the UK property market," says Stone.
