House prices FALL again: Average UK property price drops over £3123 | Property | Life & Style

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House prices have dropped since last year, the Halifax House Price Index revealed this morning. 

The headline figure of a 2.2 per cent year on year increase in average house prices is lower than the 2.7 per cent annual increase reported in December, and prices have cooled slightly month on month with a 0.6% drop between December and January.

In real terms, according to the Halifax the average house price in the UK was £223,285 last month, versus the £219,217 in January 2017, but lower than the highest recorded figure of £226,408 in November 2017.  

That said, it’s perhaps worth bearing in mind that the Halifax and other indices have forecast that this year will be flat in terms of price growth with a projected figure of between zero per cent and three per cent and the number of transactions holding at or around the total number for last year, which would then contextualise a headline figure of over two percent annual growth as absolutely within market expectations, given the current economic climate.

Russell Galley, Managing Director, Halifax Community Bank, says of the report: “Although employment levels grew by 102,000 in the three months to November, household finances are still under pressure as consumer prices continue to grow faster than wages.

“Despite the recent rise in the Bank of England Base Rate, mortgage rates are still very low.

“This, combined with an ongoing acute shortage of properties for sale, will continue to underpin house prices over the coming months.”

So, should we all be bracing ourselves for an Artic freeze on house prices in the long term?

Jeremy Leaf, former RICS residential chairman, suggests it’s perhaps just too early to tell.

He said: “In December, Halifax reported the lowest annual rise in house prices since 2012 and the first monthly fall for six months so today’s figures reflect confirmation of this trend. Hpwever, the Halifax numbers are a little historic.

“At the sharp end of the market, we’ve noticed better-than-expected viewings but won’t know whether this interest will translate into confirmed sales for the next few weeks at least.

“Prospective purchasers seem to be taking confidence from recent encouraging news about the economy and continuing low interest rates. Once again, the market is showing considerable resilience and little sign of a larger correction.”

Jeremy continued: “Nevertheless, sellers still have to be realistic and particularly recognise the importance of setting sensible asking prices if they are to generate offers.

“First-time buyers too are beginning to emerge from hibernation and take advantage of lower stamp duty, the government’s Help to Buy scheme and less competition from investors. However, lingering affordability and Brexit concerns remain common to all.”

So, whilst not perhaps the flying start to the new year many in the property industry had hoped for, together with indications suggesting that gains are likely to be more subdued in 2018 for the property market, one might suggest that bricks and mortar are still perhaps a less risky long term bet overall, given the recent volatility seen in stock markets and Cryptocurrencies.  

Follow Louisa on Twitter:  @louisafletcher



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