House price growth has fallen to its lowest rate in six years, according to new data from Halifax.
The report shows house prices increased by just 0.3% in the year to November, down from 1.5% in the year to October.
This will come as unwelcome news to homeowners and may prompt many to hold off on putting their properties up for sale.
Here we take a look at why house price growth is dwindling and what this means if you own property.
- For free advice on the best options for you if you’d like to sell your home, call Which? Mortgage Advisers on 0800 197 8461.
House price growth slumps
Annual house price growth has fallen to 0.3%, its lowest rate since December 2012, new figures from Halifax show.
Average growth in the three months from September to November fell 1.1% compared to the previous quarter. Month on month, growth fell 1.4% from October to November 2018 and the average UK house price now stands at £224,578.
Difficulties raising a deposit for a home, as well as a limited supply of properties on the market, have been identified as key contributing factors.
Russell Galley, managing director at Halifax, said: ‘High employment, wage growth and historically low mortgage rates continue to make home ownership more affordable for many, though the need to raise a significant deposit still acts as something of a restraint on the market.
‘This is largely offset by a relatively limited supply of new and existing properties for sale, which continues to sustain house prices nationally.’
- Find out more: how to sell your house
The Brexit effect: how will the housing market fare?
The UK housing market has also suffered from the tremendous uncertainty sparked by the ongoing Brexit negotiations.
House price growth fell significantly after the EU referendum in June 2016. In September this year, Bank of England Governor Mark Carney warned that a no-deal Brexit could see house prices drop by a third.
Brexit has also been found to affect the supply and demand of properties in the UK, too.
The Royal Institute of Chartered Surveyors (Rics) said its monthly indicators for demand, supply and house prices fell to multiyear low this November.
Figures show that the number of people looking for a new home in November fell to a net balance of -21%, down from -15% in October, the lowest reading since September 2017.
At the same time, the number of new properties being listed for sale fell to -11% in November, down from -10% in October, the lowest level recorded since September 2012.
Simon Rubinsohn, chief economist at Rics said: ‘Prior to the referendum, our research indicated that Brexit would only impact the higher end of the residential market, as the lower and middle market areas are domestically driven.
‘Now, however, it appears that those looking to buy and sell homes across the price spectrum, as well as those looking to invest in the UK’s residential sector, are putting off decisions until there is more certainty.’
- Find out more: what will Brexit mean for house prices?
Should you sell your home?
Whether or not you choose to sell your home right now will depend on your personal circumstances.
The property market isn’t in favour of sellers at the moment, as house prices are growing less rapidly than in recent years.
A lack of demand for homes as well as uncertainty around Brexit means that you may not get the best deal if you choose to sell in the upcoming months.
This doesn’t mean that you can’t sell if you really need to though, as demand for homes hasn’t diminished completely and you may still be able to get the asking price you want.
If you do choose to sell, you’ll need to make sure that your home is in the best condition possible to ensure it stands out on the market.
If you decide to hold off on selling and are still paying off your mortgage, now may be the time to consider whether you’re getting the best mortgage deal.
- Find out more: 7 reasons why your house isn’t selling
Remortgaging: is now the time?
Over 50,000 new homeowner remortgages were completed in October alone this year, up 23.2% according to the latest figures from UK Finance.
In total £9.2bn of remortgaging took place that month, up 22.7% from October 2017.
Jackie Bennett, director of mortgages at UK Finance said: ‘Remortgaging has reached its highest level in almost a decade, as homeowners take advantage of a competitive market and lock into attractive deals.
‘This also reflects the large number of fixed-rate mortgages coming to an end, which is expected to continue into 2019.’
Your home may be repossessed if you do not keep up repayments on your mortgage.
Which? Limited is an Introducer Appointed Representative of Which? Financial Services Limited, which is authorised and regulated by the Financial Conduct Authority (FRN 527029). Which? Mortgage Advisers and Which? Money Compare are trading names of Which? Financial Services Limited.