Morning:
6°c
House prices have stabilised, says Halifax
9 Sep 2010
House prices edged ahead by 0.2% during August as activity in the property market remained subdued, figures showed today.
The latest increase follows one of 0.7% in July and reverses most of the falls seen during the previous three months, leaving house prices at a similar level to the end of last year, Halifax said.
The group said activity in the market had been "largely static" since the start of 2010, enabling house price inflation to cool, after prices were pushed up during 2009 by a shortage of supply.
It added that it expected house prices to end the year at around the same level they started it.
The figures contrast with statistics reported by Nationwide last week, which showed that house prices had fallen by 0.9% during August, following a drop of 0.5% in July.
Data from the Bank of England also showed that only 48,722 mortgages were approved for house purchase during July, a level that economists consider to be consistent with house price falls.
The gloomy figures caused some commentators to predict that the housing market was heading for a double dip, with one economist warning that prices could fall by as much as 25% between the start of this year and the end of 2012.
But others said the recent dip in house prices was not unhealthy as the recovery in the property market had got ahead of improvements in the wider economy.
Martin Ellis, Halifax housing economist, said: "The market is broadly stable, with house price inflation having cooled since last year when supply shortages helped to push up prices.
"The improved economy, strengthening labour market and low interest rates are all supporting housing demand.
"We expect that UK house prices will remain static overall in 2010."
But others are less optimistic, pointing out that the lack of mortgage finance is limiting the number of buyers able to enter the market.
Many potential buyers have also adopted a "wait and see approach" due to concerns about the state of the economy, job security and the impact of future tax rises.
Halifax said annual house price inflation had fallen slightly to 4.6% during the three months to the end of August, compared with the same period a year earlier - the third consecutive month during which it has declined.
The average home now costs £167,953, 9% above the low reached in April last year, but still 16% below the August 2007 peak.
Reader views (5)
Sam,
the problem is that I think your pants are on fire, with precious little information of your own. A student perhaps?
If you think there is an oversupply because you can see houses for sales at the estate agents, I don't know what to tell you. that's insanely moronic.
- scotty, london, 08/09/2010 13:13
Report abuse
Scotty,
As you can read I am living in London!
Walk into any estate agent and you can see how many homes are unsold, that is the result of over supply. Then look around the new builds and see how many are unsold/empty...over supply again.
If you doubt the empty homes figure of 650,000 then simply google Grant Sapps+empty homes for further details.
Likewise google the statistics for self certification, or as some prefer liar mortgages, or lie-tobet if you are in that line of business Lol
- Sam, London,UK., 08/09/2010 12:46
Report abuse
Sam,
what part of the country are you living in?
There is no over supply of empty homes in london, nor a spate of re-possessions.
you also use "had to" wholly inappropriately, and without regards to the laws of economics.
As for the contention most homeowners used self certification... well now.
- scotty, london, 08/09/2010 11:13
Report abuse
Wow, there's a shocker, let me guess, next month it will go up, the same as it does every year and then will start to go down towards Christmas again, same as it always does too, a bit of a non story really.
- Bob, Cheam, 08/09/2010 10:14
Report abuse
The problem is there is an over supply of empty homes, with more coming onto the market from repossessions. Unfortunately builders are adding to this as a result of the £1 billion spending spree by the previous government who commissioned social housing programs.
Unfortunately under Labour in order to finance their house building program builders had to increase the price to make a profit. This in turn meant that the banks had to finance these inflated house prices by relaxing lending through self certification, at the behest of GB. The big lie to justify house building in Labour strongholds was that ere was a shotgage of housing, ignoring the empty 652,000 homes.
Housing Minister Grant Sapps has correctly identified that we should be refurbishing some of the 652,000 empty homes. This will give employment to small builders and is good for the environment.
House prices will not fall any further as most home owners used self certification to get their current mortgages, and to afford expensive homes. If they sell now they will not get another mortgage under the tighter lending criteria, and outlawing of self certification. They do not want to loose their foothold on the housing ladder and so the housing turnover of previous years will be subdued.
Off course all bets are off once interest rates increase. First to feel the pain will be the lie-to-bet landlords as they are barely covering their costs now and survive on the exceptionally low current rates.
- Sam, London,UK., 08/09/2010 09:50
Report abuse
