February 8, 2012 | Author

Author Alec Hanson

The recent House Price Index from Halifax has shown just how house prices on average have changed little during 2011.

Although the monthly change in January reported a rise of +0.6% and average house price of £160,907, the overall annual change was-1.8%.

Furthermore the difference over the pas eight months is virtually non-existent with only £132 between the January average and the May 2011 average of £161,039.

Commenting, Martin Ellis, housing economist, said:

“Notwithstanding monthly fluctuations, the average UK house price is very close to where it was eight months’ ago, at around £161,000. The continuing very low level of interest rates has helped to support housing demand, resulting in little overall movement in house prices since last spring. Low rates have contributed to mortgage payments falling to their lowest level as a proportion of disposable earnings for a new borrower for 14 years. A recent improvement in employment trends may also have supported demand.

Other Key facts reported by Halifax are:

House prices are down -0.9% over the 3 months to January compared to the proceeding three months – the fourth consecutive month this measure was slightly negative.
Modest pick up in houses activity – according to a leading indicator of completed house sales
Recent improvements in employment trends may have helped housing demand.
Lowest mortgage payments for new borrowers for 14 years, as a percentage of their disposable earnings.

“Prospects for house prices over the coming months will, to a large extent, depend on events in the Eurozone and the repercussions of developments there for the UK economy. If the UK can avoid a prolonged recession, we expect broad stability in house prices in 2012.”