Halifax: Annual house price growth rises to 4%

The latest data released by Halifax this morning has revealed that house prices in December were 4.0% higher than in the same month a year earlier.

According to the data, on a monthly basis, house prices rose by 1.7%. In the latest quarter (October to December) house prices were 1.0% higher than in the preceding three months (July to September).

HMRC Monthly property transactions data shows a rise in UK home sales in November. UK seasonally adjusted residential transactions in November were 102,050 – up by 3.2% from October and the highest level since August 2017. Year-on-year, transactions in November 2019 were approximately 1.9% higher than November 2018 (0.2% lower on a non-seasonally adjusted basis).

Russell Galley, Managing Director, Halifax, said: “Average house prices rose by 4% over 2019, at the top of our predicted range of 2% to 4% growth for the year. This was driven by a monthly gain of 1.7% in December which was the biggest monthly increase of 2019, pushing up the year-on-year growth rate and reflecting that December 2018 was a particularly weak month.

“Looking ahead, we expect uncertainty in the economy to ease somewhat in 2020, which should see transaction volumes increase and further price growth made possible by an improvement in households’ real incomes.

“Longer-term issues such as the shortage of homes for sale and low levels of house-building will continue to limit supply, while the ongoing challenges faced by prospective buyers in raising deposits will serve to constrain demand. As a result, we expect a modest pace of gains to continue into next year.”

As ever, the property industry was quick to react. Here’s what they’re saying:

Lucy Pendleton, founder director of independent estate agents James Pendleton, had this to say: “Weakness in the market the previous winter has lent the Halifax index a very strong finish for the year in the same month many voters lent Boris Johnson their vote.

“The Halifax HPI has become renowned for being the most generous of all the indices and this sprint finish for 2019 will do nothing to dislodge that reputation.

“It comes after the Halifax changed its methodology last year after a series of very high annual growth figures attracted well-publicised doubts over the index’s credibility.

“The average house has posted just over an £8,000 gain in 12 months but any suspicion that the wisdom of crowds was at work here, smelling a decisive election result that none of us on our own could quite detect, would be wishful thinking.

“That said, the Boris Bounce is expected to reveal itself in potentially dramatic fashion in the first quarter of this year. The New Year has brought with it a rise in activity across the board, with buyers and sellers sensing the cork is out of the bottle.”

Jeremy Leaf, north London estate agent and a former RICS residential chairman, says: “The Halifax house price index has proved to be a reliable indicator of property market activity over many years so is widely respected. On the back of the largest monthly increase for the year in November, prices are up even more in December on a monthly and annualised basis. But price rises are reflecting more of a shortage of stock at the moment than significant increases in demand and not widely in London where affordability is most stretched.

“On the ground, there is no doubt that the election and more certainty on Brexit is contributing to recovery in market confidence. Looking forward, we expect higher increases in values in areas where the ratio of house prices to earnings is lower.”

Original article by Warren Lewis – Property Reporter