Print friendly version 8 Sep 2010

House prices up 0.2%, reports Halifax

House prices appear to be stabilising, after a 0.2% rise in August, taking prices back to similar levels seen at the start of the year.

The Halifax house price index revealed activity has been largely static since the start of the year despite house price rises in July and August.

"These developments suggest that the market is broadly stable with house price inflation having cooled since last year when supply shortages helped to push up prices," said Martin Ellis, Halifax housing economist.

"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," he added.

Annual house price inflation in August was 4.6%, down from 4.9% in July, continuing its downward trend after reaching a high of 6.9% in May.

The average house price in August was £167,953, 9% up on the low seen in April last year. However, it remains 16% lower than the peak of August 2007.

Housing market activity has also proved broadly stable, with Bank of England industry-wide figures showing that the number of mortgages approved in the three months to July was up 1% on the previous quarter.

Halifax said that the number of approvals for the first half of the year had kept within a range of 46,000 to 50,000 per month, with H1 2010 approvals up 9% on the same period of 2009.

Affordability has significantly improved for first-time buyers, with the proportion of first-time buyers' incomes going towards mortgage payments almost halving from 50% in mid-2007 to 28% today. This is well below the 34% average of the past 24 years.

As such, first-time buyer numbers have been boosted, with CML figures revealing they were up 28% to 94,600 in the first six months of the year compared to H1 2009.


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