House prices still volatile
However, the Halifax House Price Index for September also shows a monthly drop in prices of 0.5%.
Commenting, Martin Ellis, housing economist, said: “The more volatile monthly figures showed a 0.5% decline in prices in September. This continued the mixed monthly picture experienced so far this year with four rises, four falls and one no change since January. This mixed pattern is consistent with a market where prices are lacking genuine direction.
“Greater uncertainty about economic and personal financial circumstances, together with pressure on householders’ finances from weak earnings growth, higher inflation and increases in taxes, are likely to be constraining housing demand.
“Despite these pressures, low interest rates and a rise in employment over the past year have been supporting the market, resulting in broad stability in both prices and activity. We expect little change over the remainder of this year.”
Commenting, Alex King, a director of mortgage broker, SPF Private Clients, said: “Once again, the market continues to bounce around with no discernible direction.
“The volatility of the month on month data is being accentuated by the low volume of transactions.
“For short-term prices to be said to be trending in one direction or another, you need a certain critical mass of data that simply isn’t there at present.
“Low interest rates, cheap mortgage finance and, in many areas, a shortage of homes are propping up prices while weak consumer confidence and reduced disposable incomes are causing people to sit on their hands.
“The result is a cancelling out and a property market that is essentially in limbo – unsure of its direction.
“An over-reliance on national data, such as that provided by the Halifax, masks the huge regional disparity in the UK market.
“Within a matter of miles you can have two entirely different property markets – one fairly robust, the other in reverse.
“We advise our clients to stay in tune with what’s happening in their local market, not the national market itself.
“London is a case in point. While the rest of the market struggles, the capital is proving resilient.
“What is clear is that now represents a opportunity for anyone who is able, or willing to buy.”