Saturday, 24 August 2019

House prices ‘stable’ after half a point rise

House prices ‘stable’ after half a point rise

THE average UK house price has edged up to £237,837 according to the Halifax Price Index.

This figure, for May, is 0.5 per cent up on April. In the latest quarter (March to May) house prices were 2.5 per cent higher than in the preceding three months (December to February).

Meanwhile, house prices in the three months to May were 5.2 per cent higher than in the same three months a year earlier.

This was against the backdrop of a particularly low growth rate in the corresponding period in 2018, which has had an impact on year-on-year comparisons.

Halifax managing director Russell Galley said: “We saw a slight increase in house prices between April and May but the overall message is one of stability.

“Despite the ongoing political and economic uncertainty, underlying conditions in the broader economy continue to underpin the housing market, particularly the twin factors of high employment and low interest rates.

“This is supported by industry-wide figures which suggest no real change in the number of homes being sold each month, while Bank of England data show the number of mortgages being approved rose by almost six per cent in April, reversing the softness seen in the previous month.

“While current conditions may help those looking to make their first move on to the property ladder, existing homeowners will doubtless be considering long-term house price growth which continues to look subdued in comparison to recent years.

“Looking ahead, we expect the current trend of stability based on high employment and low interest rates to persist over the coming months, though clearly any downturn in the wider economy would be keenly felt in the housing market.”

HMRC figures show UK home sales remaining steady. April saw 99,420 home sales, which is close to the five-year average of 101,249 and follows a similar result in March.

Sales in February to April fell 0.2%, against the levels in November to January. April home sales were flat against the previous 12 month average of 99,322. (Source: HMRC, seasonally-adjusted figures) 

Mortgage approvals rise back above the 12 month and 5 year averages. Bank of England industry-wide figures show that the number of mortgages approved to finance house purchases – a leading indicator of completed house sales – rose 5.9% in April to 66,261.

The April rate is just above the 5 year average monthly approval rate of 66,066, and is 1,118 above the previous 12 month average of 65,143.

While this is a notable change on a monthly basis, the approval level is still very close to the longer term averages. (Source: Bank of England, seasonally-adjusted figures)  Demand for and supply of housing remains subdued for another month. The RICS UK Residential Market Survey again showed a subdued result for nearly every measure. The sales to stock ratio dropped slightly to 30.7% and is, as last month, at its lowest rate since September 2013.

Price expectations and sales expectations showed a small improvement, for the third month running, but both expectations remain firmly negative. (Source: Royal Institution of Chartered Surveyors’ (RICS) monthly report)

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