The Land Registry has disclosed that the growth in house prices during October slowed to its lowest rate since September 2012 in an index said to be “catching up with history”.
The statistics relate to a period before the General Election results and the so-called “Boris bounce”, since when agents have reported a spike in activity in the property market. Land Registry figures show house prices increased by 0.7% annually during October, down from 1.3% in September and the lowest rate of growth in seven years.
Prices also fell 0.7% on a monthly basis that suggest an average UK house price of £232,944.
House price growth was strongest in Northern Ireland where prices increased by 4% annually, while the weakest growth was in London which suffered a 1.6% decline.
Provisional estimates for sales in August suggest that although transactions decreased by 5.5% across the UK, falling by 4.1% in England, 4% in Scotland and 2.5% in Wales, they increased by 4.9% in Northern Ireland.
Uncertainty and doubt swept away
However, Lucy Pendleton, founder director of independent estate agents James Pendleton, has suggested that the property market looks very different since the election outcome.
The uncertainty and doubt, she said, regarding Brexit and the housing market have been swept away by the new PM and the market has reacted straightaway. Consequently, the Land Registry report reflects a status quo that has instead become a distant memory.
However, the Boris bounce in house prices that is already felt to be well under way is not yet visible. The UK house price index has definitely been overtaken by events and will spend the next two months treading water while it catches up with history. For the time being, there are distinct signs on the high street that buyers and sellers are returning to the market.
Pendleton believes without a doubt that the UK is experiencing a revival in activity but it will be a couple of months before it is known whether the recovery will begin to drive prices higher or if a greater supply of property will result in price moderation and a welcome increase in business for brokers and agents.
New enquiries for property, Pendleton added, leapt on the day of the election result and foreign buyers appear to be as enthusiastic as their domestic counterparts to re-enter the market.
Slow but steady growth ahead
Mike Scott, chief property analyst for estate agent Yopa, has said that the Land Registry figures are based on completions in October, although the purchase price would have been agreed some time around June. Other indicators, he believes, have already demonstrated that there was a slowdown during the summer.
The rate of increase, Scott expects, will be seen to recover in future releases of figures, albeit with another minor slowdown during the first quarter of next year, as the political uncertainty of the months of October and November come to light in the report.
For the year as a whole, Scott concluded, a return to slow but steady growth in house prices is expected, roughly in line with wage increases and general inflation.