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Halifax House Price Index October 2019

The broadly flat trend in house price growth seen in recent months continued in October, with Halifax reporting that prices rose just 0.9% year-on-year in the month.

On a month-on-month basis, house prices dipped 0.1% in October, while on a quarterly basis prices edged up 0.2%. The average house price declined slightly to £232,249.

Source: Halifax HPI, IHS Market

Favourable fundamentals – such as low unemployment at 3.9% and sustained real wage growth – have come up against cautiousness, with consumer confidence firmly negative at -14 in October according to GfK’s index.

Weakness in house price growth is expected to continue in the short term as homeowners and prospective buyers alike anticipate Brexit. Limited choice in the market has held back sales, and the latest data from RICS shows that house appraisals are down year-on-year – so the supply of housing is unlikely to pick up quickly.

More broadly, demand in the market faces affordability challenges from large deposits and lofty stamp duty required in some areas – although new build registrations have been shifting in favour of affordable housing and build to rent.

While this paints a bleak picture for home-related retailers, players such as Dunelm and ScS that can offer consumers affordable ways to spruce up homes are likely to continue to post above-market growth.

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