Shortage Of Properties ‘Will Prevent House Prices Dropping’

There has been a slowdown in the growth of house values recently, but a lack of supply of properties will prevent prices from falling a lot.

This is the opinion of Martin Ellis, Halifax housing economist, who commented in response to the bank’s most recent House Price Index. This showed that property values only grew by 0.1 per cent from August to September, and had actually declined by 0.1 per cent over the quarter.

Its annual change was +5.8 per cent, which is much lower than the peak of ten per cent in March, and a fall from 6.9 per cent in August.

He stated: “Very low mortgage rates and a shortage of properties available for sale should, however, help support price levels over the coming months.”

Mr Ellis noted that house prices have not grown as much compared with previous months as there has been a “lengthy period where house prices have risen more rapidly than earnings [which] has put pressure on affordability, therefore constraining demand”.

His comments could be good for those who use steel reinforcement mesh in their day jobs, as it could mean housing construction is given a boost.

Indeed, while many people in the industry believed Brexit would have an adverse effect on construction, recent figures from the Office for National Statistics (ONS) showed new work increased by 0.5 per cent between June and July.

ONS statistician Nick Vaughn added that this was predominantly led by the housing sector “after nearly two years of orders remaining relatively flat”.

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