Halifax Index reveals steady market
The report revealed house prices in the UK rose by 1.4 per cent, countering January’s fall of 0.4 per cent, with annual house price inflation standing at 5.5 per cent.
The lender also predicted a house price rise of 3 per cent for 2006, matching estimated retail price inflation rises during the year.
Commenting on the findings, Martin Ellis, chief economist at Halifax, said the figures matched the lenders predictions for the year. “House prices increased by 1.4 per cent in February, more than offsetting January’s fall. This mixed pattern of monthly price rises and falls is a typical feature of a slower housing market.
“The combination of improving economic growth, low interest rates and high employment will continue to underpin a healthy level of housing demand over the next few months,” he added.
Halifax has also published its annual review into the cost of owning and running a home. It revealed the cost of running a home rose by 7 per cent in the financial year 2004/05, outpacing the 4.6 per cent rise in inflation over the same period.
For the first time since Halifax has issued the survey, council tax and utility bills are estimated to represent the single biggest component of total costs in 2005/06, accounting for a higher proportion of the overall costs than mortgage repayments.
Peter O’Donovan, mortgage manager at Bestinvest, was shocked at Halifax’s findings. “I am surprised by the research and would be quite alarmed if my fuel and gas bills were coming in above my mortgage payments,” he said.