halifax hpi

Halifax have just released their latest House Price Index (HPI).

• Prices in the last three months to January were 2.2% higher than in the same three months a year earlier, although the annual change in January was lower than in December (2.7%)

• House prices remained unchanged in the recent quarter (November-January) from the previous quarter (August-October); on this measure prices are down from the 1.3% quarterly rise recorded in December

• On a monthly basis, prices fell for the second consecutive month in January (by 0.6% following a 0.8% decrease in December)

• The average price of £223,285 at the beginning of the year is 1.9% higher than in January 2017 (£219,217), however, the current price has edged down after recording £226,408 – highest on record – in November

Russell Galley, Managing Director, Halifax Community Bank, said:

“Annual house price rises have slowed from 2.7% in December to 2.2% in January – the lowest rate since July last year. We’ve seen a monthly decline as well as the quarterly rate of growth flattening out. “Although employment levels grew by 102,000 in the three months to November, household finances are still under pressure as consumer prices continue to grow faster than wages.

Additionally, it’s still too early to see any impact for first-time buyers from the abolition of stamp duty on purchases of up to £300,000, which was announced in the November Budget. “Despite the recent rise in the Bank of England Base Rate, mortgage rates are still very low. This, combined with an ongoing acute shortage of properties for sale, will continue to underpin house prices over the coming months.”

Key Facts

  • Total UK home sales in 2017 were marginally lower (-0.6%) than in 2016 at 1.23 million
  • Mortgage approvals for house purchases ended the year with a sharp fall
  • Decline in instructions for sale continues
  • The number of first-time buyers is estimated to have reached 359,0001 in 2017, according to the Halifax First-Time Buyer Review

Founder and CEO of Emoov.co.uk, Russell Quirk, commented:

With wage growth failing to keep pace with consumer prices, the immediate aftermath of the festive season is a tough time of year for all as demonstrated by this rather fitting market freeze. January is always a struggle and even with the current low cost of mortgage rates, market activity will remain predictably muted as buyers look to find their stride financially.

Price growth will soon thaw and as the market gains momentum into spring and summer the pick-up in buyer interest and market activity will see prices once again on the up.

 While it may be too soon to see any direct impact from the abolition of first-time buyer stamp duty, a number of industry sources are reporting a strong uplift in buyer demand among this demographic.

But as we are all too aware, there is a severe lack of building stock to quench the thirst of the nation’s aspirational buyers as it is, let alone with this additional influx of interest.

As a result, it is possible that another Government initiative to ‘help’ those priced out of the market could inadvertently see prices increase as demand is fuelled and further outweighs supply. There is also a chance that shrewd sellers in the £280,000 region will increase their asking prices to sit just below the stamp duty threshold in order to maximise their property potential in an otherwise slower market. If this were to happen, prices would see an additional boost as a result, but to the detriment of struggling buyers.