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House price growth falls to five-year low

House prices are rising at their slowest annual pace in five years, with growth falling from 2.5pc in September to 1.5pc in October, according to the latest figures from Halifax.

The figures mirror those released by mortgage lender Nationwide last week that showed growth had fallen from 2pc in September to 1.6pc in October, far below the 2pc-3pc range recorded over the previous 12 months.

Halifax’s house price index is based on homes bought with mortgages, excluding council house sales, shared ownership and help-to-buy schemes, while Nationwide’s is based on owner-occupier house purchase transactions involving a mortgage. Buy-to-let and cash deals are not counted.  

Halifax found that on a monthly basis, house prices rose marginally by 0.7pc in October, following two consecutive monthly falls. The average house price is now £227,869.

Russell Galley of Halifax said: “House prices continue to be supported by the fact that the supply of new homes and existing properties available for sale remains low. We see this continuing to be the case over the coming months and we remain supportive of our 0-3pc forecast range.”

The volume of residential transactions has been broadly flat over the past year and is likely to remain so in the coming months, Halifax added.

North London estate agent Jeremy Leaf said that realism was “hitting home” to many sellers who are starting to appreciate that the first offer they receive “could very well be their only one, however unpalatable it may be”.

“However, listings are increasing and four out of five sellers are said to be buyers so there are some small grounds for optimism when the Brexit fog finally clears.”

The UK housing market has slowed since the EU referendum in 2016, and many economists last year predicted growth would flatline in 2018.

Last December, the Royal Institution of Chartered Surveyors said that it expected house price growth to “grind to a halt in 2018”, amid a toxic cocktail of low levels of sales and homes on the market, as well as cautious buyers.

However, growth has remained within the 1-3pc range for the past 12 months.

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