2nd HPI also shows 2013 gets off to a good start

Halifax House Price Index

House prices in the three months to January were 1.9% higher than in the previous three months according to the latest Halifax house Price Index.

Key facts

  • House prices in the latest three months (November 2012-January 2013) were 1.9% higher than in the preceding three months (August 2012-October 2012). This was the second successive increase in prices on this measure of the underlying trend and the biggest rise for three years since January 2010 (2.9%).
  • Prices in the three months to January were 1.3% higher than in the same three months a year ago. This was the first rise in this annual measure since October 2010 (1.2%).
  • House prices fell by 0.2% in January. This followed successive rises in November and December.
  • Activity at its highest for five years. Home sales increased by 5% in 2012 to 932,000; the highest annual total since 2007 (1,619,000). Sales in the final three months of 2012 were 4% higher than in the preceding quarter on a seasonally adjusted basis. (Source: HMRC)
  • Further rise in mortgage approvals points to continuing increase in sales. The industry-wide number of mortgages approved to finance house purchases rose for the fifth successive month in December. Approvals for purchase – a leading indicator of completed house sales – increased by 3% to 55,800 in December. Overall, there was a 19% increase in approvals over the last five months of 2012. (Source: Bank of England, seasonally-adjusted figures)

Commenting, Martin Ellis, housing economist, said:

“The signs of improvement in the housing market towards the end of last year continued in January. Prices in the three months to January were 1.9% higher than in the previous three months; the strongest figure in this measure of the underlying trend for three years. Prices were also 1.3% higher than in the same period a year ago, marking the first annual rise for 27 months.

“Market activity has also improved with sales in 2012 at their highest for five years. Rising mortgage approval numbers point to further increases in home sales in the coming months. The Funding for Lending scheme has helped lenders to lower interest rates and improve availability in the past few months. This is likely to have been a factor contributing to the pick-up in both home sales and prices.

“The outlook for the UK economy and house prices, however, is more unclear than usual. Subdued economic growth and pressures on household finances are expected to constrain housing demand. Overall, we expect continuing broad stability in house prices nationally in 2013.”

Alec Hanson

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