Halifax House Price Index (3604E)

TIDM68FF

RNS Number : 3604E

HBOS PLC

06 April 2011

Halifax House Price Index

 
 National Index   March 2011 
 
 
                     All Houses, All Buyers Index (1983=100) 
   Annual Change     Quarterly Change   Monthly Change 
       -2.9%               -0.6%             0.1% 
           Standardised Average Price (seasonally adjusted) GBP162,912

Commenting, Martin Ellis, housing economist, said:

"House prices continue to fall at a modest pace as measured by the quarterly rate of change, the best measure of the underlying trend in price movements. Prices in the first quarter of 2011 were 0.6% lower than in the fourth quarter of 2010. There was a 0.1% rise in prices in March and prices were a similar amount above those at the end of 2010.

"The overall decrease in prices in the first quarter of 2011 compared with the previous quarter was a little lower than the quarterly falls recorded in the third and fourth quarters of 2010. The recent increase in employment, particularly those in full-time jobs, may have been an important factor supporting the market.

"Our forecast remains for a 2% decrease in house prices in 2011 as a whole. Uncertainty over the general economic outlook and individual financial circumstances are likely to constrain housing demand, resulting in some modest downward pressure on prices."

Key facts

-- House prices in the first three months of 2011 were 0.6% lower than in the previous three months, showing acontinuing modest decline in prices according to this measure of the underlying trend. This was the fourth consecutive quarterly fall, but it was an improvement on the decreases in the third and fourth quarters of 2010 (-1.0% and -1.1% respectively).

-- Prices in March were marginally (0.1%) higher than at the end of 2010. The average UK house price stood at GBP162,912 in March.

-- Prices in March were 2.9% lower than a year ago as measured by the average for the three months to March against the same period a year earlier. This is the biggest annual decline since October 2009.

-- House sales show signs of stabilising but at a low level. The number of mortgages approved to finance house purchase - a leading indicator of completed house sales - recovered further from its December low with a 2% increase between January and February on a seasonally adjusted basis, according to Bank of England industry-wide figures. Approvals were virtually unchanged compared with February 2010, at 47,000, but were 60% lower than four years earlier (116,700 in February 2007).

-- The Budget contained a number of announcements relating directly to the residential property market. Successful implementation of some of these measures should increase the supply of new homes and boost the number of properties for rent, helping to reduce the size of swings in house price movements over the cycle.

-- The introduction of a new shared equity scheme, known as FirstBuy, will help some first-time buyers to enter the market through the purchase of a newly-built property. The buyer will put down 5% of the purchase price with a further 20% provided by the government and the housebuilder in the form of a low interest loan. The impact, however, will be limited as it aims to assist 10,000 households - equivalent to 5% of all first-time buyers in 2010.

-- Just 1.1% of residential property sales will be affected by this month's increase in the stamp duty rate from 4% to 5% for homes worth over GBP1 million. Unsurprisingly, London has the highest proportion of million pound home buyers (4.7%). The increase will add GBP10,000 to the total stamp duty bill for someone paying GBP1 million for a home.

-- Some signs of improvement in the labour market. The number of people in employment increased by 32,000 in the three months to January compared with the previous three months, according to the latest figures from the ONS. This rise was entirely due to an increase in the number in full-time employment (75,000) whilst part-time employment fell by 43,000. Total employment has risen by 296,000 over the past year with a 90,000 increase in full-time employment.

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.

This information is provided by RNS

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