UK house prices slowed by less than expected in November, Halifax says

UK house price growth slowed by less than expected in November, mortgage lender Halifax said on Thursday.

In terms of quarterly rates of change the increase in house prices moderated to an 8.2% year-on-year pace last month, from the 8.8% seen in October, to hit £186,941. That was their slowest rate of change since February.

Nevertheless, it was better than the 7.9% print expected by analysts.

Compared with the previous month, prices advanced by 0.4%, one tenth of a percentage point more than forecast, largely reversing October’s decrease.

Home sales in 2014 are set to exceed the 1m mark for a second year, the first time since 2006 and 2007 in which home sales have come in above that level.

Tepid wage growth seen weighing on prices

“[…] Housing demand continues to be supported by a strengthening economy, rising employment levels, still low mortgage rates and the first gain in ‘real’ earnings for several years,” economist Martin Ellis commented.

Even so, Halifax predicts that house prices nationally will rise moderately next year, in a range of 3-5%, but with a more even pattern by regions.

For his part, Dr.Howard Archer, chief UK+European economist at IHS Global Insight said: "Looking ahead, significant restraint on house buyer interest is expected to come from more stretched house prices to earnings ratios, tighter checking of prospective mortgage borrowers by lenders and the prospect that interest rates will eventually start to rise in 2015."

In November, the ratio of house prices to national average earnings for full-time male employees was at 5.02, versus 5.01 in the month before and 4.72 one year back.