One of the most respected UK house prices indices reported that following 15 consecutive months of growth, prices ground to a halt in October. Nationwide said the rate of monthly change in property values was 0% in October – marking the first time since June 2015 that prices have not increased month on month.
The average UK house price in October was £205,904, which was 4.6% higher than a year ago. The annual rate of growth has slowed, from a 5.3% increase seen in September.
Robert Gardner, chief economist at Nationwide, told the Guardian, “After 15 successive monthly increases, UK house prices were unchanged in October after taking account of seasonal factors. As a result, the annual rate of house price growth slowed to 4.6%, from 5.3% in September, though this is still in line with the growth rates prevailing since early 2015.”
The market could still be feeling the effects of the changes to Stamp Duty for buy-to-let landlords, which came into effect in April this year and saw many investors push their purchases forward into March.
Gardner said there were big regional differences in affordability, however, and the cost of servicing a typical mortgage as a share of take-home pay was now above its 2007 peak in London.
He said: “By contrast, housing appears far more affordable in northern England, Wales and Scotland.”
There are also signs that the property market in general is a little subdued, with around 10% less activity in the market compared to levels seen last year. This could be the beginning of a kind of stand-off between buyers and sellers, with buyers more relaxed about waiting for the right property if prices are no longer rising, and sellers holding back on putting their property on the market if prices look to be stagnating.
Online estate agent HouseSimple.com report that four out of five UK towns and cities experienced a drop in property supply in October, with the number of new listings down 6.9% on average across the UK, according to their latest Property Supply Index. CEO Alex Gosling said, “At this time of year we’d expect to see committed sellers rushing to put their properties on the market before the traditionally quieter period kicks in as we get closer to Christmas.
“The weather has also been unseasonably mild recently, and that should be encouraging sellers to list their houses as it presents an opportunity to show off their property in the best possible light.
“Instead, we have seen new listings stall in October, with supply down in four out of five UK towns and cities. This might simply be a correction after September saw a surge in new properties coming onto the market, and the overall drop in property supply is still less than 2% in October compared to September.
“We may need to wait until the New Year now to see market activity pick up. But there will always be people that have to sell their properties in November and December, and that could mean opportunities to negotiate a good deal for buyers who have their finance in place and are ready to proceed.”