Halifax Reports Uk House Prices Rose In October By 1.2 Per Cent
News Posted On: 10 November 2009
UK house prices rose by 1.2 percent in October mortgage lender Halifax said on Tuesday. The year on year price decline recorded at a negative 1.5 percent is now at its smallest value in 1½ years. Halifax stated that this measure would also likely turn positive in the coming months, as prices continue to strengthen due to constricting supply and increasing demand.
The average price of a home in the UK was now £165,528 the lender said.
The Halifax data came in higher than that of than rival mortgage lender Nationwide (0.4%), but on the other hand Nationwide has posted six consecutive months of rises as opposed to four by the Halifax. At least the two major mortgage lenders agree on the general direction and for now that is up.
Halifax did sound a note of caution though.
"Clearly, it's an unusual market at the moment in so far as there has been a combination of strong demand but quite an acute shortage of property for sale that seems to have been driving prices up quite rapidly in the last few months," said the Halifax chief economist Martin Ellis, though he thinks prices for 2009 are now likely to better their most recent forecast of a 7 percent decline this year
"We don't think that this [level of growth] will be sustained. We think that people have been encouraged to put their properties on the market because it has improved and that will bring supply and demand back into a better balance, which will take off some of this upward pressure on prices."
His view was corroborated by another analyst Howard Archer, economist at IHS Global Insight who said:
"While house prices may well rise further in the near term from their early-2009 lows, we suspect that they will be prone to significant relapses further out."
The Halifax and Nationwide numbers corroborate a recent survey by the British Bankers' Association showing that mortgages approved by UK banks in September jumped 76.8 percent on the same month a year ago.
"Mortgage lending by the high street banks is continuing to improve from the lows seen earlier this year and the number of house purchase approvals continues to recover. Housing market activity will depend, however, on more properties coming on to the market," said BBA Director of Statistics David Dooks.
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