House price growth to slow?

Posted on December 8th, 2016 | Categories - News

New figures show that the rate of growth in house prices increased in November, but the news came with a warning that the market may slow in 2017.

Figures from the Halifax show that house prices rose by 6% in the year to November; taking the value of the average home to £218,002.

Housing slowdown?

However, before homeowners get carried away with the seeming constant rise in house prices, the Halifax also said that “annual house price growth may slow over the coming months”.

In fact, the Nationwide has previously reported that house price growth actually slowed in November to 4.4%.

At the same time, a survey from the Royal Institution of Chartered Surveyors (Rics) showed that the number of property transactions has slowed throughout the year.

Rics also said that the housing market would get off to a slow start in the new year due to a lack of homes for sale.

The situation has been partly blamed on the government’s changes to stamp duty changes, which have seen rates rise for houses worth over £1,000,000 and for Buy to Let investors.

Commenting on the housing market, Simon Rubinsohn, RICS Chief Economist, said: “A key issue for the housing market is the slowdown in transaction activity since the spring, which is clearly being reflected in the RICS Agreed Sales data as well as in official figures.”

He continued: “Although there are some signs that the numbers may begin to edge upwards in the new year, the combination of macro-uncertainty, the ongoing supply shortfall, with stock levels around historic lows, and the myriad of tax changes impacting on buyers suggest that any pick-up in activity will be relatively modest.

“This is significant, not just for the housing market itself, but also for the wider economy given how much of consumer spending is tied in with home purchases.”

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