House Prices Going Nowhere this Year, Says the HalifaxMake Text Bigger
House prices are unlikely to change for the rest of the year, according to one of the UK’s largest mortgage lenders.
The housing market has stuttered along for most of the year, with insignificant rises and falls as prospective buyers turned to renting due to problems raising large cash deposits and mortgages.
A general lack of confidence in the economy has not helped prices, which the Halifax says are 2.3% down compared with the same time last year.
The rate of decline is slightly lower than the fall of 2.6% seen in August and continues the improvement since May, when prices were 4.2% lower than those in May 2010.
According to the lender, the average house price is £161,132 – although values have varied over the last 12 months from a peak of £164,949 in October last year to a low of £160,393 in April this year.
Martin Ellis, the lender’s housing economist, said: “House prices between July and September were slightly higher than April to June. The 0.1% increase between the two quarters was the first quarterly rise since the beginning of 2010.
“The more volatile monthly figures showed a 0.5% decline in prices in September. This continued the mixed monthly picture experienced so far this year with four rises, four falls and one no change since January. This mixed pattern is consistent with a market where prices are lacking genuine direction.”
Despite the poor performing economy, the Halifax feels better job prospects and low interest rates have underpinned the housing market and stopped prices falling.
“Greater uncertainty about economic and personal financial circumstances, together with pressure on householders’ finances from weak earnings growth, higher inflation and increases in taxes, are likely to be constraining housing demand,” said Ellis.
“Despite these pressures, low interest rates and a rise in employment over the past year, have been supporting the market, resulting in broad stability in both prices and activity. We expect little change over the remainder of this year.”
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