House price growth slowed to seven-year low in October before ‘Boris bounce’

The Land Registry has revealed that house price growth slowed to its lowest rate since September 2012 during October in an index that is now said to be “catching up with history”.

The figures relate to a period before the General Election results and the so-called Boris bounce, where agents have since reported a resurgence in activity.

Land Registry figures show house prices increased by 0.7% annually during October, down from 1.3% a month before and the lowest rate of growth in seven years.

Prices also fell 0.7% on a monthly basis, suggesting an average UK house price of £232,944.

House price growth was strongest in Northern Ireland where prices increased by 4% annually, while the lowest was in London with a 1.6% decline.

Provisional estimates for sales in August suggested transactions fell by 5.5% across the UK, dropping by 4.1% in England, 4% in Scotland and 2.5% in Wales but increased by 4.9% in Northern Ireland.

However, Lucy Pendleton, founder director of independent estate agents James Pendleton, suggested the market now looks very different since the election outcome.

She said: “The spinning compass of uncertainty and doubt have been dislodged by the north star of a new PM, and the market has reacted immediately.

“As a result, the tired and frustrated reality that is still faintly visible in this Land Registry report reflects a status quo that is already a distant memory.

“Not yet visible is the Boris bounce in house prices we all sense is already well under way. The UK house price index has well and truly been overtaken by events.

“The index will now spend the next two months going through the motions while it catches up with history. Meanwhile, there’s every sign on the high street that buyers and sellers are returning to the fold.

“The UK is certainly experiencing a resurgence in activity but we won’t know for a couple of months whether, on balance, this will begin to push prices higher or whether greater supply will have a moderating influence while brokers and agents enjoy a pick-up in volumes.

“New enquiries for property picked up the day of the election result and foreign buyers are matching their domestic counterparts for renewed enthusiasm.”

Mike Scott, chief property analyst for Yopa, said: “The figures are based on completions in October, where the purchase price will have been agreed around June, and other indicators have already shown that there was a slowdown over the summer.

“We expect that the rate of increase will recover in future releases, though with another brief slowdown in the figures during the first quarter of next year as the political uncertainty of October and November works its way into this report.

“For the year as a whole, we expect a return to slow but steady house price growth, roughly in line with wage increases and general inflation.”

 

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