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Halifax HPI: Prices rise 1.9pc

Robyn Hall

March 6, 2013

And in the month of February, house prices increased by 0.5% which followed a small fall in January’s house prices.

Martin Ellis, housing economist for Halifax, said: “We expect to see a national increase in house prices over the course of 2013. Weak income growth and continuing below-trend economic growth, however, are likely to remain significant constraints on housing demand.”

Home sales increased slightly from 82,280 in December 2012 to 82,320 in January 2013, which was the seventh successive monthly increase in sales after allowing for seasonal influences.

But the positive news follows the Bank of England’ lending figures, released last week, which showed the number of mortgage approvals for house purchases, a leading indicator of completed house sales, fell by 2% between December and January.

Mark Harris, chief executive of mortgage broker SPF Private Clients, said: “The housing market presents a confused picture. On the one hand, prices continue to rise on a monthly and quarterly basis, according to the Halifax, and on the other, lending fell in the final quarter of last year, according to the Bank of England.”

Ellis said the buoyancy of the labour market has probably helped support housing demand.

The number of people in employment in the fourth quarter of 2012 was 584,000 higher than in the same period a year earlier.

Higher full-time employment was responsible for two-thirds (67%) of this increase.

He added: “This increase in both house prices and activity in recent months is consistent with evidence of some improvement in market conditions. The more than half a million increase in the number of people in employment over the past year is likely to have been a factor supporting housing demand.”

However Jonathan Samuels, chief executive of Dragonfly Property Finance, warned against using the latest index as an indication that the market has reached a turning point.

He said: “Few will see this fairly upbeat reading by the Halifax as the beginning of a market recovery.

“The overall economic backdrop remains challenging and consumer confidence is still delicate.”

Ben Thompson, managing director of Legal & General Mortgage Club, said: “As the budget approaches we need to focus more on how to actually get the housing market properly moving again.

“Although there has been a noticeable increase in first-time buyers numbers we do need to see subsequent movers move on to their next homes in order to create some movement and choice at the bottom of the market.

“Many are stuck due to high levels of stamp duty, restrictive lending criteria or just a lack of confidence to take on more debt. Unless there is a wholesale appetite to spend money on stimulating this part of the market more homes will need to be built in the right areas and quickly.”

He added: “Our hope is that planning, stamp duty and possibly even capital rules and mortgage insurance are all being given urgent and full consideration – we need to look after this recent housing market recovery, for the good of the wider economy.”


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