Source: The Guardian

UK house prices rose at their slowest pace for seven months in October in the latest sign of a cooling housing market.

Average house prices increased by just 0.1% from the previous month to £271,000, the slowest growth since March, when prices fell by 0.4%, according to the Office for National Statistics.

House price inflation measured on an annual basis cooled to 10.4% from a seven-year high of 12.1% in September.

Brian Murphy, head of lending at Mortgage Advice Bureau, said: “House prices have experienced a slight slowdown in recent months, with seasonal variations as well as tighter mortgage regulation reining in property prices. However, average prices are still well up on last year, with the UK as a whole experiencing double-digit growth.

Excluding London and the south-east, where house prices are rising at the fastest rates, prices grew by 6.7% in the year to October, the ONS said.

London house prices soared by 17.2% in the 12 months to October, although this was a slowdown compared with 18.8% growth in the year to September. The average price of a house in the capital has fallen by about £10,000 since August, and was £504,000 in October – the highest of any region in England.

In north-east England, the average was £152,000, the lowest of any English region.

The only two English regions where house price inflation accelerated in the year to October were the south-east and Yorkshire and Humber.

The average price of properties bought by first-time buyers was £208,000 in October, up 12% over the year, slower than September’s 13.3% annual rate of growth.

Campbell Robb, chief executive of Shelter, the housing and homelessness charity, said persistently high prices meant a home was still out of reach for many people.

He added: “This is yet another blow to the millions of young people and families desperate to build a stable future in a home of their own.With the average house in England now costing more than 10 times the average wage, millions of people are finding themselves stuck in the rent trap, with little hope of ever saving for a deposit.”

On Monday the government said a scheme offering first-time buyers under the age of 40 a discount of at least 20% on new-build homes would begin in the new year. Under the Starter Home programme, 100,000 properties will be offered at a discount, but fewer affordable homes will be built as a result. The new homes will be built on under-used and brownfield land and developers will be freed from the usual requirements to fund affordable homes and infrastructure. The proposals will undergo an eight-week consultation.

For existing owners moving house, the average cost of a home was £312,000, 9.7% higher than a year earlier, down from 11.5% in September according to the ONS.

The chancellor’s autumn statement on 3 December outlined changes to stamp duty which he claimed would cut the tax for 98% of homebuyers.

Richard Snook, senior economist at accountancy firm PwC, said this was likely to provide a modest boost to house prices and the number of sales.

Publishing new market forecasts on Tuesday, the Council of Mortgage Lenders said it expected mortgage lending to increase in 2015 and 2016 but at a slower pace than this year. Net lending is expected to increase from £25bn in 2014, to £32bn next year and £38bn in 2016, the CML said, positive prospects for economic growth, job creation and real wage growth, coupled with low interest rates, should underpin the housing market.