House prices did not change at all in October, according to Halifax?s most recent House Price Index, in contrast to Nationwide?s findings earlier this week that prices had risen. Property economists are suggesting that the housing market has ?paused for breath? after cumulative rises of 3% over the last 2 months. But although prices have not changed, in the 3 months to October prices were 3.9% higher than the same period a year ago.
?The overall pattern of price movements over the past few months shows that the market has strengthened compared with earlier in the year,? says Martin Ellis, Chief Economist for the Halifax. The Halifax?s figures vary dramatically from those of the Nationwide who note a 1.3% rise in prices in October.
Halifax warns that October?s subdued house price inflation is a sign of things to come: ?The static level of prices in October suggests that we are not poised for another sustained period of sharply rising property values? says Mr Ellis.
Nevertheless buyer enquiries for property increased for the fourth successive month in September, according to the latest RICS survey, marking the longest run of rising enquiries in two years. ?Continuing economic growth, the high level of employment and a boost to household sentiment regarding the future direction of interest rates following August’s base rate cut are all supporting housing demand? Mr Ellis says.
But Halifax does not forecast a prolonged period of housing demand: ?This year’s slowdown in the pace of UK economic growth and the ongoing historically high level of house prices relative to average earnings are, however, expected to curb the recent improvement in housing demand and prevent a marked pick-up in prices,? he explains.