Halifax: Supply and demand imbalance fuels 9.7% house price growth

Halifax: Supply and demand imbalance fuels 9.7% house price growth

Data from the latest Halifax house price index has found that in the three months to February, the average price of a home was 9.7% higher than in the same three months a year earlier. The annual rate remains within the 8%-10% range where it has been for nearly the entire period since the start of 2015.

House prices during December-February were reported to be 3.0% higher than in the preceding three months.

House prices decreased by 1.4% between January and February. This offset much of January’s 1.7% rise. Monthly house price changes can be volatile. The quarter on quarter change is a more reliable indicator of the underlying trend.

Increase in areas where homes have risen more in value than owner’s total earnings. The increase in average house prices has exceeded total average employee’s net earnings in more than a quarter of local authority districts across the UK – 108 out of 380 (28%) – over the past two years, according to the report.

The data also highlighted that mortgage approvals were higher. The volume of mortgage approvals for house purchases – a leading indicator of completed house sales – increased by 5% between December and January. Approvals, at 74,600, were the highest since January 2014.  (Source: Bank of England, seasonally-adjusted figures)

Supply remains very low but signs of slight improvement. New instructions by home sellers increased in January for the second consecutive month. This contributed to the first rise in the stock of secondhand properties for sale for ten months.


Martin Ellis, Halifax housing economist, said: "House prices in the three months to February were 3.0% higher than in the previous three months whilst the annual rate remained unchanged at 9.7%.

Prices continue to rise at a robust pace driven by a significant imbalance between supply and demand. Whilst this position is likely to continue over the coming months, there are some tentative signs that the supply situation may be beginning to improve. Instructions for secondhand properties coming up for sale have increased in the past two months and the level of housebuilding increased significantly in 2015. Further ahead, increasing affordability issues, as house price increases continue to exceed wage growth, are likely to curb housing demand and cause price growth to ease.”

Russell Quirk, founder and CEO of eMoov.co.uk, commented: “There are slight signs that the UK market is cooling, with the February wobble seeing a decrease of 1.4% since January. However, this is only marginal as since November prices are up by another 3% and nearly 10% in the last year. Demand is always an influential factor where an increase in house prices is concerned, so the impending stamp duty changes due in April have no doubt helped to keep the UK market buoyant.

There has been a flurry of buyers keen to secure that second home or buy to let investment before the April deadline, as well as an increase in the stock available, due to savvy buyers looking to cash in and obtain a higher price than usual during this period of high demand.

We expect once the stamp duty dust has settled the market will cool slightly, but whilst UK and foreign buyers are still fuelling this increase, the issue of affordability will continue to take a back seat, rather than helping to restrain a continually inflating market.”

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Christian Donovan
Christian Donovan 18 Aug 2017

The write-down on house values, combined with the fall in the GBP saddled the fund?s property portfolio with a 1.4% loss in the second quarter. The shocking amount of $240 million.

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Samantha Goodman
Samantha Goodman 11 Aug 2017

Interesting point of view.

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Samantha Goodman
Samantha Goodman 11 Aug 2017

It depends on the people, some older adults decide to make a long-distance move in order to live closer to their children or settle in a place with a lower cost of living.

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brandonlee10
brandonlee10 24 Jul 2017

The financial ramifications of the triggering of Article 50, the starting gun for Britain's departure from the EU, are far from clear. Buyers will be most cautious in London, given that buying a home in...

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IrisJ.
IrisJ. 19 Jul 2017

Great advice, but may I also add that when buying an already built home, make sure you do all of the proper inspections. Most importantly pest inspection because people tend to get surprised when they

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IrisJ.
IrisJ. 17 Jul 2017

The third point is, in my opinion, the most important one. People have become too inconsiderate and careless when it comes to rented properties. If a landlord wants to protect their property, regular visits...

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cornishalan
cornishalan 10 Jul 2017

Added to the cost of purchasing these village properties are the above average maintenance costs. Particularly where the property is a listed building or requires specialist building skills such as thatching...

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Jo Mullett
Jo Mullett 07 Jul 2017

Here in Swansea, known as the Japanese knotweed capital of the UK, it never fails to amazes me that people have no idea of the potential problems this invasive non-native plant can cause when buying or...

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NathanG
NathanG 05 Jul 2017

McDonalds, for example, have been purchasing their real estate on prime locations for years. If something happens to the company they'll have invaluable assets that will be able to save them. We might

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Jonah
Jonah 04 Jul 2017

Graham: surprised to see you cite the "extra tax liability" as capping out at ?560. It doesn't - the extra tax is exponential, as it is levied on the income (i.e the inflating level of rental income you...

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Dianne Griffen
Dianne Griffen 29 Jun 2017

Be very wary of anyone bringing you deals that they have ?found? and want to ?sell on to you? or ?joint venture? with you on ? you need a proper legal contract for this, involve a RICs surveyor to confirm...

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jason hadzikostas
jason hadzikostas 28 Jun 2017

The most important thing is a budget. Students have to manage their spendings in food, house maintenance, books and many other things. According to me, student Studios are the perfect option for them as...

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