Market update: House price biggest rise since March

The Telegraph

House prices rose 1.4pc in October, the biggest monthly rise since March, according to Halifax.

Halifax's closely watched index reported monthly falls in July and August, and a slight rise in September of just 0.3pc. The jump in October contrasts with Nationwide's index, which last week reported that house prices were flat month on month, although both indices can be volatile. 

On a rolling three-month basis, year-on-year growth in the quarter to the end of October was 5.2pc, down from 5.8pc in the previous period. This is almost half the rate of growth in the three months to March, of 10pc. The average price of a home is now £217,411. 

The boost in monthly prices was put down to increased buyer demand, due to falling mortgage rates, and also a record shortage of homes on the market, according to the Royal Institution of Chartered Surveyors (Rics), which was caused partly by price falls in previous months.

The Bank of England reported that mortgage approvals for house purchases rose to a three-month high in September, and Rics said that buyer inquiries were the highest since February, suggesting that market activity is starting to pick up after softening during the year due to uncertainty over the referendum.

Martin Ellis, a housing economist at Halifax, said: "This expected slowdown [in house price growth] appears to have been largely due to mounting affordability pressures, which have increasingly constrained housing demand." 

Andrew Wishart from Capital Economics said: "Data from Halifax point to house prices stagnating in the third quarter. That echoes the broad picture outlined by other indices that, while house price growth slowed in the wake of the referendum result, there is no evidence of any substantial fall in values."

Capital Economics has forecast that house price growth will slow to annual rate of 2pc by the end of the year.

Read more at: http://www.telegraph.co.uk/property/house-prices/property-market-perks-up-as-house-prices-make-biggest-monthly-ju/