Halifax announced a 1% rise in house prices this June despite a drop in the market in the 3 months prior to June 2012.
House prices have been fluctuating throughout the first half of the year with four monthly rises and two monthy drops. April was the worst month with a drop of 2.3%, possibly due to the end in the stamp duty holiday, which would have distorted figures around that time.
Martin Ellis, Halifax’s housing economist, commented “There has been a marked improvement in the annual rate of change over the past 12 months. A year ago, in May 2011, house prices were falling at an annual rate of 4.2%”.
Halifax are reporting that house prices are roughly 0.5% lower than at this time last year, making the average property price £162,417. Obviously there are wide variations between different regions with the London market remaining buoyant, but other areas slipping back.
By contrast Nationwide reported a 1.5% drop in the market for June. However this could be because of the different methods each lender uses to calculate their figure. Halifax uses a 3 month period to compare prices between different years, whereas Nationwide use a direct monthly comparison.
While this shows an unexpected underlying stability in the housing market it seems to be a fragile balance with buyers still having the upper hand. It seems unlikely that house prices will change radically for the rest of the year as the market remains cautious in the face of global instability, and the resultant worry about job security.
Wage levels compared to property prices are measured by lenders using the Affordability Ratio which is based on 2 average full time wages, and this currently rests at 4.36 compared to 5.86 in the second quarter of 2007. Mark Harris, chief executive of mortgage broker SPF Private Clients, says: “There is still a lack of confidence among buyers and sellers, and a lack of stock coming to market as a result.
Halifax’s Ellis adds “We expect little change in prices and sales over the remainder of the year provided that the UK’s economic outlook does not deteriorate significantly.”
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