Halifax House Price Index (6339A)

TIDM68FF

RNS Number : 6339A

HBOS PLC

04 February 2011

Halifax House Price Index

 
 National Index   January 2011 
 
 
               All Houses, All Buyers Index (1983=100) 
    Annual Change -2.4%       Quarterly Change     Monthly Change 
                                    -0.7%               0.8% 
     Standardised Average Price (seasonally adjusted) GBP164,173

Commenting, Martin Ellis, housing economist, said:

"Prices in the latest three months were 0.7% lower than in the previous quarter, continuing the slight downward trend on this underlying measure. House prices increased by 0.8% between December and January.

"We expect limited movement in house prices overall this year. There are however, likely to be some monthly fluctuations with the risks on the downside. The prospects for the market in 2011 are closely aligned with the performance of the wider economy. Consumer confidence has fallen recently, partly as a result of nervousness about the economic outlook.

"On a positive note, there have been further signs that the recent downward trend in prices is causing homeowners to be more reluctant to put their properties on the market. This development should help to relieve downward pressures on prices as long as it is sustained. We also expect interest rates to remain very low for some time, supporting a favourable affordability position for many existing mortgage borrowers and those entering the market."

Key facts

-- House prices in the three months to January were 0.7% lower than in the preceding three months. This continues the slight decline on this measure since last spring. The pace at which prices are falling, however remains markedly lower than during the second half of 2008 when quarterly declines of 5-6% were recorded.

-- On an annual basis, prices in January were 2.4% lower as measured by the average for the latest three months against the same period a year earlier.

-- Fewer properties coming onto the market for sale. The latest RICS survey, for example, reported a decline in new seller instructions for the third successive month in December. A continuation of this trend would help to reduce the imbalance between demand and supply and support house prices.

-- Slight rise in housing market activity in 2010. The number of home sales in the UK increased by 4% from 846,000 in 2009 to 884,000 in 2010, according to the latest HMRC figures. Despite this modest improvement, sales remain very low historically and are just over half the annual levels of 1.6-1.7 million in 2006 and 2007.

-- Latest mortgage approval figures affected by the weather. Bank of England industry-wide figures showed a 10% decline in the number of mortgages approved to finance house purchase - a leading indicator of completed house sales - between November and December on a seasonally adjusted basis. These figures, however, are difficult to interpret due to the unusually severe weather in December, which is likely to have reduced the level of approvals in that month. Similarly, the 28% fall compared with December 2009 is significantly affected by the ending of the stamp duty holiday on properties between GBP125,000 and GBP175,000 at the end of 2009, which boosted the number of approvals during the last few months of that year.

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 2011.

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