Halifax: house prices see second quarterly increase

House prices in the three months December - February were 2.6% higher than in the previous three months, marking the second successive quarterly increase.

Related topics:  Finance News
Rozi Jones
5th March 2015
housing market house down decline drop decrease

However, it remains below the rates recorded between July and September 2014. The three monthly rate increased despite a small monthly fall in February due to robust rises in both December and January.
House prices fell by 0.3% between January and February, partly offsetting January’s 1.9% rise.

Prices in the three months to February were 8.3% higher than in the same three months a year earlier. This was a little lower than January’s annual increase of 8.5% and significantly below the peak of 10.2% in July 2014.

Home sales eased further in January 2015. Despite a 15% increase between 2013 and 2014, home sales fell for the fourth consecutive month in January. Sales in the three months to January were 2.5% lower than in the preceding three months and sales in January 2015 were 6.1% lower than in January 2014.

The volume of mortgage approvals for house purchases increased for the second consecutive month in January, to 60,786. The recent modest rise in approvals follows five successive monthly falls between July and November 2014. Approvals in January 2015 were also 20% lower than in January 2014.

Housebuilding also increased in 2014, with the number of completions in England rising by 8% from 109,490 in 2013 to 118,760 in 2014. This was the second successive annual increase. Despite this pick-up, the level of completions remained 33% below the total in 2007 and is well below the rate at which new households are being formed. The number of new homes being started in the final quarter of 2014 was also 9% lower than in the same period a year earlier, highlighting the ongoing weakness in housebuilding.

New instructions increased for the first time in six months in January. There was also a modest rise in the number of properties for sale on surveyors’ books. Nonetheless, the supply of homes on the market remains low and has changed little over the past year.

Commenting, Martin Ellis, housing economist, said:

"House prices in the three months to February were 2.6% higher than in the preceding three months. This measure of the underlying rate of house price growth increased for the second consecutive month in February despite a small monthly fall in prices. Annual price growth nonetheless eased, from 8.5% in January to 8.3%, and is comfortably below last July’s peak of 10.2%.

“The firming in price growth shown by the recent pick-up in the three month-on-three month comparison and indications of a modest rise in activity are likely to be due to a boost to housing demand as a result of increases in real earnings and spending power, further recent falls in mortgage rates and stamp duty changes.

“The supply of both new and secondhand homes available for sale remains low; another factor that is likely to be supporting house prices. Supply remains tight despite housebuilding in England increasing for the second consecutive year in 2014 and a recent rise in the number of properties coming on to the market.”

Mark Harris, chief executive of mortgage broker SPF Private Clients, added:

"The month-on-month fall in house prices, the first time this has happened since October, means Halifax is the latest index to highlight the slowdown in the housing market.

"However, it is not worth worrying too much about a monthly fluctuation in an ‘average’ index. Despite this monthly fall, mortgage approvals continue to rise, as borrowers realise it’s a great time to get a mortgage. Assuming you meet lenders’ affordability criteria, rates are at their cheapest ever levels - and are unlikely to be bettered."

Jeremy Duncombe, Director, Legal & General Mortgage Club, commented:

"House prices may have slightly decreased this month, but it is important homeowners don’t get too caught up in the short term fluctuations in the market and instead look at the long term trends. House prices are down 0.3% this month, but have increased by 8.3% in the past year.

"A fundamental issue affecting the market is the chronic shortage of housing supply, which means many people become priced out. This issue is currently high on the political agenda as we build up to the General Election, with all the main parties pledging to build more homes. However, whatever the outcome of the election, whoever takes power will need to fulfil their promise to build more homes and work towards obtaining a balanced market."

More like this
Latest from Property Reporter
Latest from Protection Reporter
CLOSE
Subscribe
to our newsletter

Join a community of over 30,000 intermediaries and keep up-to-date with industry news and upcoming events via our newsletter.