The UK House Price Index, October 2016

Commenting on the UK House Price Index, Andy Knee, chief executive of LMS, said:

“The slowdown in the rate of house price growth is good news for first time buyers desperate to take their first steps on the housing ladder. It is no accident that November’s RICs Residential Market Survey showed a 13% increase in the number of new buyer enquires. LMS expects the slowing, which has been particularly acute in the second half of 2016, to continue in the first few months of 2017.

“But in spite of the slowdown in the rate of climb, the national average house price continues to rise, a sign that confidence in the UK housing market remains unperturbed in the wake of June’s referendum. The housing market has held up partly because, so far at least, the broader economy has performed better than expected since the referendum. Employment is high, and there is a close relationship between unemployment and house prices. There is also a reduced supply of existing stock as people become more cautious about selling their home. And growth in new housing increased by just 1.7% in October.

“So demand heavily outweighs supply. The chancellor’s announcement in the Autumn Statement of a new Housing Infrastructure Fund worth £2.3bn is not enough to alleviate the problem. As we enter a year rigged with political uncertainty, we must ensure that first time buyers are not left behind.”