Halifax HPI confirms fall in annual house price growth


At this moment in time very few people will be surprised to see a softening of the UK housing market with the latest Halifax House Price Index (HPI) reflecting this. Annual house price growth has fallen from 2.5% in September down to 1.5% in October. This is the lowest growth rate since March 2013 but there does appear to be underlying support for the UK housing market.

We are seeing the cumulative impact of more than two years of Brexit concerns coming to fruition. Buyers appear reluctant to chase prices but more importantly sellers have not hit the panic button and are not prepared to partake in a race to the bottom.

Property listings down

Online estate agent Housesimple confirmed a significant drop in property listings averaging around 5.5% across the UK but rising to 6.8% in London. While recent figures confirm that house prices outside of the South-East of England and London were holding firm, this reduction in London property listings is interesting. The latest data suggests that London house prices are moving into negative annual house price growth for the first time in many years. However, if the fall in London house price listings continues, this should offer a degree of support to the market.

UK employment market

While some people are sceptical of the UK government’s unemployment figures, which show unemployment approaching a historic low, this is reducing the affordability gap. One of the often unspoken aspects of Brexit is the potential to increase UK employment numbers as the domestic workforce is asked to fill gaps left by migrant workers. It is unclear to what degree this will help the UK employment market because there will still be fluid immigration into the UK.

Talk of the UK government adopting an Australian style immigration system, targeting specific skills shortages, is interesting. At the moment all options appear on the table with regards to Brexit and future immigration numbers but we are approaching crunch time.

Low mortgage rates

Even though the Bank of England has on numerous occasions in recent months encouraged expectations of an increase in base rates, might this strategy be put on hold? Whether or not a Brexit deal is agreed with the European Union there will be a period of relative confusion and, to a certain extent, instability. It would surely make sense to maintain relatively low interest rates during this period to encourage investment in business, consumer spending and support house prices?

Mark Carney, Governor of the Bank of England, has already agreed to extend his tenure to give an added degree of stability. Will he now change his vocal support of higher interest rates?

Treading water

Many experts believe that UK house price growth over the next 12 months could be anything between 0% and 3% depending on the outcome of Brexit talks. There is a definite feel that the market is treading water but no degree of panic as yet. There are buyers sitting on the sidelines waiting for the “inevitable fall” but many have been waiting since 2016. A reduction in house price listings and increased spending power are offering a surprise level of support.


If, and this is a big if, we are at the darkest moment before the Brexit dawn then surely UK house prices are beginning to look interesting? Rental yields are still holding up, savings rates are still minimal and thankfully wage inflation is starting to catch up. Now all the UK government need to do is arrange a mutually acceptable Brexit deal to remove underlying market fears….
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