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House prices continue to rise faster than other surveys suggest, Halifax reckons

Thu, 7th Dec 2017 09:30


(ShareCast News) - House prices are continuing to surge higher, according to research by Halifax that runs contrary to most other surveys of the housing market.



The Halifax house price index increased by 0.5% month-to-month in November, slightly above the consensus forecast of 0.2% and following a 0.3% increase in October to mark the fifth rise in a row.

House prices in the three months to November rose 2.4% compared to the preceding three month period, which is the This is the fastest price growth on this measure since January.

Growth in the past three months compared to the same period last year slowed to 3.9%, from the 4.5% announced a month ago, which was expected by the market.

The average price of 226,821, said Halifax, is 3.2% higher than January's 219,741.

Russell Galley, Halifax's managing director said: "The imbalance between supply and demand continues to support house prices, which doesn't look like changing in the near future."

However, he added: "Further ahead, increasing affordability issues, as price increases continue to outstrip wage growth, are likely to curb housing demand and cause price growth to ease. We do expect the Government's first-time buyer Stamp Duty changes to provide some stimulus to demand, particularly in London and the South East where the impact is greatest."

Economist Sam Tombs at Pantheon Macroeconomics said Halifax's suggestion that house prices are surging again conflicts with virtually every other housing market indicator.

The 2.4% growth in the three months to November reported by Halifax compares to Nationwide's 0.6% and a seasonally adjusted version of Rightmove's data of 0.1%.

"The Nationwide and Rightmove measures have been much less volatile than Halifax's in the past and they chime with surveys from RICS and NAEA indicating weakening new buyer demand," Tombs said.

"As a result, we remain inclined to place much more weight on the Nationwide and Rightmove measures. Looking ahead, we remain concerned that even relatively small increases in mortgage rates-in response to last month's Bank Rate hike and the impending closure of the Term Funding Scheme-will reduce the size of mortgages that households take out, while falling consumer confidence will additionally subdue demand."

As such, Pantheon still expect house prices merely to flatline over the next 12 months.

Russell Quirk of eMoov.co.uk said the market was "showing signs of winding down with a decline in mortgage approvals and sale instructions", but said sales were reaching their highest level this year, with plenty of people looking to complete this side of Christmas.

"The market should continue to build on this momentum after the December lull and the outlook is promising for the coming year," Quirk felt.




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