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.”
