House price inflation subdued, but Scotland and Northern Ireland outperform the UK
The UK housing market continued to record ‘relatively subdued price inflation’ during the third quarter of 2018, according to the Halifax House Price Index.
The index, which is administered by IHS Markit, revealed that prices rose by 2.7% on a year-on-year basis, up from 2.2% in the previous quarter and matching the level seen over the first three months of the year.
On a quarter-on-quarter basis, house prices were up by 1.6% compared to quarter two – the best quarterly increase in prices since the final three months of 2016.
The average UK house price improved to a new record level of £230,309, £6,108 up on a year earlier.
Regional trends varied significantly in the third quarter, with Scotland, the West Midlands and Northern Ireland leading the way, with house price inflation of 9%, 7.6% and 7% respectively.
Only two of 12 regions continued to experience declines in house prices on a year-on-year basis in the third quarter of the year. The North of England (-5.5%) experienced its steepest fall since the end of 2012, whilst Yorkshire & Humber (-2.7%) recorded a second successive year-on-year decline.
Paul Smith, economics director at IHS Markit, said: “The UK housing market continued to tread water during the third quarter of 2018. Although prices were up at a slightly faster rate, underlying inflation remains stuck in a narrow range of 2-3% and subsequently amongst the weakest seen over the past five years.
“And this trend is likely to persist in the near-term.
“Whilst limited supply, high levels of employment, various government incentives and still low borrowing rates provide ongoing price support, these will continue to be broadly offset by stagnant real wages, the potential for higher borrowing costs and, perhaps most crucially, ongoing Brexit uncertainty.”