Halifax House Price Index

TIDM68FF

RNS Number : 6240X
HBOS PLC
09 December 2010

+----------------------------+----------------------------+
| National Index | November 2010 |
+----------------------------+----------------------------+

+----------+------------------+-------------------+-----------------+-------------------------+
| | All Houses, All Buyers Index (1983=100) |
+----------+----------------------------------------------------------------------------------+
| Annual Change -0.7% | Quarterly Change | Monthly Change | |
| | -2.1% | -0.1% | |
+-----------------------------+-------------------+-----------------+-------------------------+
| | Standardised Average Price (seasonally adjusted) GBP164,708 |
+----------+----------------------------------------------------------------------------------+
| | | | | |
+----------+------------------+-------------------+-----------------+-------------------------+

Commenting, Martin Ellis, housing economist, said:
"Prices fell by only 0.1% in November, and in the three months to November were
2.1% lower than in the preceding three months. The rate of decline in prices on
the three month-on-three month measure has picked up over the past few months,
but it remains well below the declines of 5-6% in the second half of 2008. The
highly mixed picture of monthly house price rises and falls recorded this year
continued. Such a varied monthly pattern is consistent with a relatively flat
underlying trend for house prices.

"Higher numbers of properties for sale, combined with reduced demand, have
caused the recent decrease in prices. There are, however, some tentative signs
that homeowners are becoming more reluctant to put their properties on the
market which, if continued, will help to relieve the current downward pressure
on prices. Interest rates are likely to remain very low for an extended period,
which will support the improved mortgage affordability position for homeowners.
As a result, we do not expect to see a significant fall in house prices."

Key facts

· Prices in the three months to November were 2.1% lower than in the
preceding three months. The rate of decline, however, is significantly lower
than the quarterly rate of decline of -5% to -6% during the second half of 2008.
House price data on a quarterly basis provides a clearer indication of the
overall market trends, smoothing out the volatility caused by the reduced number
of monthly transactions in all house prices indices' monthly figures.

· Prices in November were 2.4% lower than at the end of 2009.

· House prices are now marginally lower than a year ago. Prices in November
were 0.7% lower on an annual basis as measured by the average for the latest
three months against the same period a year earlier. This was the first annual
decline since November 2009 and continues the recent downward trend from a high
of 6.9% in May.

· House prices in November were 6.5% higher than in April 2009. Despite
the recent downturn, prices remain above the trough reached in spring 2009. The
average price is now GBP164,708; GBP10,045 higher than in April 2009.

· The low interest rate environment has reduced the burden of servicing
mortgage debt. Typical mortgage payments for a new borrower have fallen from a
peak of 48% of average disposable earnings in mid 2007 to 29% in 2010 Quarter 3.
This key measure of affordability is at a better level than the long-term
average over the past 25 years (37%) and is an important factor supporting
housing demand.

· Housing market activity is softening. Bank of England industry-wide
figures show that the number of mortgages approved to finance house purchase - a
leading indicator of completed house sales - continued on its gentle downward
trend, falling for the sixth successive month in October. The number of
approvals in October (47,200) was 5% lower than in April (49,700). The ending
of the stamp duty holiday on properties between GBP125,000 and GBP175,000 at the
end of 2009 boosted the number of approvals during 2009 Quarter 4. This will
have an adverse impact on annual comparisons over the next couple of months.

The Halifax House Price Index is prepared from information that we believe is
collated with care, but we do not make any statement as to its accuracy or
completeness. We reserve the right to vary our methodology and to edit or
discontinue/withdraw this, or any other report. Any use of this report for an
individual's own or third party commercial purposes is done entirely at the risk
of the person making such use and solely the responsibility of the person or
persons making such reliance. c Bank of Scotland plc all rights reserved 2010.

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