According to the recent Price Index Report published by the Nationwide Building Society, UK property price growth is down for the third month in a row. House prices have increased by 0.3 per cent in November but the overall annual growth has slowed to 8.5 per cent.According to Robert Gardner, Nationwide’s chief economist, this is the third month in a row when annual growth has been weakened with housing market activity remaining relatively low. He also highlights that the number of mortgages approved in September was almost 20 per cent below the level prevailing at the start of the year and 27 per cent below the long-term average.
Similarly, housing market turnover rates are well below long-term averages. For example, the number of mortgage transactions is currently equal to around 4 per cent of the housing stock – which is well below the long-run average of 6 per cent.
Gardner explains that a stronger economy should underpin the housing market activity, he said;
There is something of a disconnect between the slowdown in the housing market in recent months and broader economic indicators, which have remained relatively upbeat. While cooling in the London market is a part of the story, this is unlikely to be main explanation for the slowdown (indeed, in Q3, 10 of the 13 UK regions saw the pace of annual price growth slow and two regions saw quarterly price declines). Affordability does not appear overly stretched, at least at the UK level, with first time buyers continuing to represent an unusually high proportion of mortgage activity and with typical mortgage payments as a share of average income close to the long run average. Historically low mortgage rates have helped to mitigate against the fact that house prices have been outstripping income growth. Forward looking indicators, such as new buyer enquiries point to further softness in the near-term. However, if the economy and the labour market remain in good shape and mortgage rates do not rise sharply, activity is likely to pick up in the quarters ahead.
Danny Luke, spokesperson for Quick Move Now, says;
As one of the UK’s largest house buyers, we are used to seeing a slow-down in the market at this time of year and there is certainly an element of seasonality to this report, however, over the last quarter we have seen a rise in the number of enquiries to Quick Move Now as people are investigating their options to enable them release their property and move on with their lives. The average property is on the market for 274 days and this figure is only set to increase if the economy doesn’t improve.
Established in 1998, Quick Move Now, the UK’s leading home buyer, offers a secure and hassle-free quick house sale. Our experienced team, efficient processes and substantial cash reserves enable us to make immediate purchases, so we can buy any residential house quickly, freeing the vendor to move onto their next property and move on with their lives.