There is a fair amount of conflicting data on house prices in the UK property market at the moment.
According to recent data from Halifax, the UK’s largest lender, UK house prices have been rising for five months in a row by 0.5% month-on-month.
On an annual basis, Halifax found that house price growth slowed, going from 4.5% in October to 3.9% in November.
However, prominent economists are skeptical about Halifax’s data given that their calculations have been volatile in the past.
It might be more reliable to look at the equivalent growth rates from Nationwide and Rightmove, which predict that the market will continue to slow. Nationwide found that mortgage approvals fell to more than a 1-year low. According to their books, UK house prices only grew by a modest 2.5% in the past year.
The FT suggests that data from Nationwide and Rightmove is more reliable, especially given that they correlate with surveys from RICS and NAEA.
The stagnation of the market will come as no surprise given the current political climate. The chaos in Parliament and uncertainty caused by Brexit are undoubtedly factors affecting growth in the housing sector.
This is reflected in research by Knight Frank; they forecast robust growth over the next five years, despite their modest predictions for 2018 (a 1% rise across the nation and a 0.5% fall in London).
It is best to take a broader view of these figures and take everything with a pinch of salt. Phillip Hammond’s recent announcement to boost house building and to cut stamp duty for first-time buyers might stimulate the market a little, but we must also take into account factors such as rising interest rates and the state of the UK economy.
Once the Brexit deal is completed, there is hope that momentum will pick up once again.