House prices see fastest rise in 18 months‎

Prices in October were 2.3% lower than at the end of 2009 on a seasonally adjusted basis, reveal Halifax

Related topics:  Mortgages
Millie Dyson
4th November 2010
Mortgages
The underlying pace of house price growth has turned moderately negative in recent months. The rate of decline, however, is significantly lower than the quarterly rate of decline of -5% to -6% during the second half of 2008.

House prices remain higher than a year ago. Prices in October were 1.2% higher on an annual basis as measured by the average for the latest three months against the same period a year earlier. This continues the recent downward trend from a high of 6.9% in May.

House prices in October were 6.6% higher than in April 2009. Despite the recent downturn, prices remain above the trough reached in spring 2009. The average price is now £164,919; £10,256 higher than in April 2009.

Housing market activity is softening. Bank of England industry-wide figures show that the number of mortgages approved to finance house purchase – a leading indicator of completed house sales – fell for the fifth consecutive month in September. The number of approvals in Quarter 3 was 3% lower than in Quarter 2.


Commenting, Martin Ellis, housing economist, said:


"Prices in the three months to October were 1.2% lower than in the preceding three months. This measure gives a better indication of the underlying trend in house prices than the monthly changes.

"There has been a very mixed picture of monthly house price rises and falls throughout 2010, which continued in October with prices rising by 1.8% following September's decline, reflective of flat house prices. The rate of decline in prices on the three month-on-three month measure is markedly less than the quarterly declines of more than 5% recorded during the second half of 2008.

“An increase in the number of properties available for sale in recent months, together with a decline in demand, has put some downward pressure on prices in recent months. We do not believe that prices are set to fall sharply over a sustained period.

"Interest rates are likely to remain very low for an extended period, which will continue to support the improved mortgage affordability position for homeowners. Low rates and stable employment levels are benefiting homeowners."

"Prices in the three months to October were 1.2% lower than in the preceding three months. House price data on a quarterly basis provides a clearer indication of the overall market trends, smoothing out the volatility caused by the reduced number of monthly transactions in all house prices indices’ monthly figures.

" All the major house price indices are indicating an underlying slowdown in house prices notwithstanding a divergence in monthly reporting."
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