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Halifax: House prices accelerating again
House prices rose 1.2 per cent in November, according to Halifax, the third big rise in four months.
The Halifax house price index, which uses in-house mortgage data to calculate the UK's average house price, has now shown annual house price growth accelerating for four months in a row.
After July's nine-year low in house price growth, property values increased 1.9 per cent in August, 1.1 per cent in September, were flat in October, and then rose by 1.2 per cent in November.
If this level of growth continued, house prices would rise 12.6 per cent in a year.
However, four month-on-month falls in house prices in the last 12 months - accompanied by generally slow growth - mean that house prices in November were only 4.5 per cent higher than 12 months previously.
But the recent growth spurt is not being taken as a sign of things to come by most analysts.
"The slowdown in UK economic growth over the past year and the historically high level of house prices relative to average earnings are, however, expected to curb the recent improvement in housing demand and prevent another sustained period of sharply rising property values," explained Martin Ellis, Halifax chief economist.
Howard Archer, chief UK economist at Global Insight, agreed: "The Halifax data will undoubtedly increase speculation that the recent clear pick up in housing market activity and buyer interest is starting to feed through to revive house prices.
"[But] we remain sceptical that house prices are set to see sustained sharp rises any time soon. Most other house price indices have remained relatively muted overall in recent months, including the Nationwide (who reported house prices to be flat month-on-month in November and up just 2.4 per cent year-on-year) and a particularly comprehensive index produced by the Financial Times (up 0.1 per cent month on month and 2.5 per cent year on year in October)."
The Halifax house price index, which uses in-house mortgage data to calculate the UK's average house price, has now shown annual house price growth accelerating for four months in a row.
After July's nine-year low in house price growth, property values increased 1.9 per cent in August, 1.1 per cent in September, were flat in October, and then rose by 1.2 per cent in November.
If this level of growth continued, house prices would rise 12.6 per cent in a year.
However, four month-on-month falls in house prices in the last 12 months - accompanied by generally slow growth - mean that house prices in November were only 4.5 per cent higher than 12 months previously.
But the recent growth spurt is not being taken as a sign of things to come by most analysts.
"The slowdown in UK economic growth over the past year and the historically high level of house prices relative to average earnings are, however, expected to curb the recent improvement in housing demand and prevent another sustained period of sharply rising property values," explained Martin Ellis, Halifax chief economist.
Howard Archer, chief UK economist at Global Insight, agreed: "The Halifax data will undoubtedly increase speculation that the recent clear pick up in housing market activity and buyer interest is starting to feed through to revive house prices.
"[But] we remain sceptical that house prices are set to see sustained sharp rises any time soon. Most other house price indices have remained relatively muted overall in recent months, including the Nationwide (who reported house prices to be flat month-on-month in November and up just 2.4 per cent year-on-year) and a particularly comprehensive index produced by the Financial Times (up 0.1 per cent month on month and 2.5 per cent year on year in October)."
posted by Bruce Wayne at 10:18 AM
Halifax: House prices accelerating again
2 Comments:
I think the market will slow considerably as the economic reality of government mismanagement bites! (I am not being political here it is just my views onthings). We are losing manufacturing jobs at an alarming rate to India, China, and now worse still eastern Europe who are now part of the EU.
I do not see there being a housing crash as before, but I DO see a significant and prolonged slowing of the market apart from certain hotspots like south west wales etc.
Quite agree anon. I found this report last week:
HOUSE prices in the UK are 'significantly overvalued' a new analysis of the world housing boom has warned.
Global house prices have been driven up by relatively easy lending and low interest rates, with the UK's prices soaring due to demand from buy-to-let investors, an increase in net migration and tight supply due to restrictive planning regulations.
The report also pointed to house prices as 'significantly overvalued' in Spain, where British demand for holiday homes has been blamed for pushing up costs.
It warned of the danger of an extended period of large falls in house prices with implications for a slowdown in consumer spending.
The study by the Organisation for Economic Co-operation and Development said of 15 countries with booming property markets, only the UK, Ireland and Spain were 'significantly overvalued', taking into account demand and supply.
However, the Paris-based organisation noted that even though mortgages had risen, homeowners' ability to service that debt had improved since the early 1990s.
It said the current housing boom was unusual because of its duration, size and the degree to which it was widespread among OECD countries. The OECD forecast that the Bank of England's main interest rate would remain at its current level of 4.5%, although it warned that 'house prices have become potentially more sensitive to even modest changes in their (interest rate) levels'.
UK growth was predicted to be 1.7% this year ? down from April's forecast of 2.4% - but the OECD said it saw this picking up to 2.4% next year and 2.7%, in 2007.
Figures released yesterday by the Nationwide and Bank of England gave further evidence that the UK's housing market had a soft landing in 2005, despite widespread fears of a crash.
The Nationwide House Price index stabilised in November, with prices remaining level at an average of £157,139, after October's increase of 1.3%. The building society said that put house price increases at 2.4% for the previous 12 months, compared to 15% a year earlier.
News there had been no change in the index came as a blow to those hoping for sustained growth before the end of the year, after October's bounce back. But figures released by the Bank of England showed growing confidence, with mortgage approvals for October rising to £7.2bn.
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