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Halifax and Nationwide disagree over future house price growth

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  • 05/09/2002
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There has been no let up in house price inflation, according to the UK's two largest lenders. Hali...

There has been no let up in house price inflation, according to the UK’s two largest lenders.

Halifax reported an increase of 1.9% in July, bringing the annual rate of house price inflation in the UK to 20.8%. Nationwide meanwhile recorded an increase of 2.5% in July bringing its annual rate up to 21%.

The increases bring the price of the average UK property to £111,823 according to Halifax and £108,818 according to Nationwide.

However, the similarities between the two lenders’ reports stop when it comes to house price growth going forward.

Gary Styles, head of group economics at HBOS, said: ‘Indicators of housing market activity, while confirming a buoyant marketplace, also show some early signs of slowing. The latest figures from Bank of England show the number of mortgage approvals for house purchase eased in June from the record levels recorded in May. Inland Revenue transactions for June also show a modest decline.’

He added that sluggish income growth, higher interest rates and lower buy-to-let volumes would quell demand for property.

Nationwide, however, found little evidence of a slowdown.

Alex Bannister, group economist at Nationwide, said: ‘Despite reports of a slowdown in the housing and lending markets, there is little hard evidence. Survey and anecdotal evidence suggest severe shortages of property on estate agents’ books and sales are at their highest since 1989. Shortages of this sort are common when property prices are rising swiftly and maybe exacerbated when existing homeowners are slow to place their home on the market before securing a property to buy.’


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