halifax reports highest quarterly rise in uk house prices since 2006
News Posted On: 08 January 2010
On Thursday the Halifax released its end of year figures for the UK housing market, and as expected they make comforting reading for homeowners. Perhaps the biggest surprise was the realisation that quarterly price growth was now back to 2006 levels – well before the credit crisis.
For the last three months of 2009 (Q4) prices were 3.5 percent higher than in Q3. Compared to 2008 Q4, prices were 1.1 percent higher, the first such annualised quarterly rise since March 2008.
In what has been a remarkably good year considering its inauspicious start, 2009 saw prices climb 9.4 per cent since the April lows said the lender.
The latest monthly rise recorded was considerably better than that reported by Nationwide at the end of last month. Marking the 6 th straight monthly increase the Halifax' December 1% rise came after a revised 1.3% gain the previous month. The lender said the average price is 5.6 percent up from this time last year, similar to the figure reported by the Nationwide.
Halifax now predicts that over the course of 2010 prices will plateau. However this time last year most analysts were predicting the housing market to end 15-20% below where it actually finished up. There is a saying – predictions are hard to make, especially about the future.
Possibly the number one factor governing the strength of the housing market absent another global crash will be the availability of credit, and interest rates. However, interest rate policy is self regulating – if the Bank of England does hike rates it will be to cool off inflation and slow down growth to sub-bubble levels. If the market needs low rates it should get it.
In the last week of 2009 Britain's biggest building society the Nationwide also reported that house prices were up - 0.4% in December and 6 percent higher oner the year.
George Buckley, chief UK economist at Deutsche Bank, says that the Halifax and the Nationwide numbers show British house prices rose at an annualised rate of 12.5% over the past six months.
In the unlikely event that this rate of growth continues into 2010 expect the BoE to step in with rate rises and who knows maybe even quantitative uneasing. You can get too much of a good thing...
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