You are here: Home - News -

House prices took a plunge in January: Halifax

by:
  • 07/02/2019
  • 0
House prices took a plunge in January: Halifax
The average price of a property in the UK dropped by 2.9% in January according to the latest Halifax house price index.

As a result, the average property is now worth £223,691.

It’s the second time in the last three years that house prices have started a new year with a fall, and a stark contrast to the 2.5% increase seen in December. On a quarterly basis, house prices have now fallen 0.6%, while year-on-year they are up marginally, having increased just 0.8%.

House price growth to remain subdued

Russell Galley, managing director at Halifax, downplayed the monthly drop, arguing that the “bigger picture” is that house prices have seen “next to no movement” over the last year. He suggested this could either be viewed as a sign of resilience given the economic uncertainty or a continuation of the slow growth seen over the last few years.

He added: “On the supply side the most constraining factor to the health of the market is the shortage of stock for sale, although this does support price levels. On the demand side we see very high employment levels, improving real wage growth, low inflation and low mortgage rates. All positive drivers tempered by the challenges of raising deposits. On balance therefore we expect price growth to remain subdued in the near term.”

Jonathan Hopper, managing director of Garrington Property Finders, noted that January is often a tough month, but argued that seasonality “gives only a slight sugaring to the bitterness of Halifax’s data”.

He continued: “Barring an improbable Brexit solution that magically avoids both economic and political turmoil, a return to universally rising prices appears unlikely any time soon.”

Slow market leading to rate drops

Mark Harris, chief executive at SPF Private Clients, suggested that flat growth may be the best the market can hope for given the difficult political situation, pointing out that Brexit was causing would-be buyers to sit on their hands.

He added: “Fewer transactions has meant less business for lenders, yet they remain keen to lend. They run big operations and need their staff to be busy, so have two options – change their risk profile or mortgage pricing. The latter is easier, which is why many lenders have reduced their mortgage rates, and is great news for borrowers who are ready to make a move.”

Sam Mitchell, chief executive officer of online estate agent Housesimple.com, argued it was difficult to read too much into the “roller coastering” house price figures.

“We are actually seeing healthy transaction levels in many northern areas such as Yorkshire, where there seems to be an almost stubborn refusal to let Brexit govern their lives,” he continued.

“What’s clear on the ground is that there’s plenty of pent up buyer demand, but buyers are watching Brexit developments like hawks and taking their time to commit.”

There are 0 Comment(s)

You may also be interested in

Read previous post:
Foundation promotes Grant Hendry to head of national accounts

Foundation Home Loans has promoted Grant Hendry to the role of head of national accounts from national account manager.

Close