5
Feb
House prices 'up 1.9% in January'
Article from www.news.bbc.co.uk on Thursday 5th
February 2009.
The price of UK homes rose by 1.9% in January, compared to
December, according to the Halifax.
However it warned that one month's figures did not indicate an end
to the downward trend in prices, which it says have dropped 17.2%
in the past year.
The average house price has now reached £163,966, according to
the Halifax.
Last week, a survey by Nationwide suggested house prices fell by
1.3% in January, and they said job worries were putting off people
buying homes.
Martin Ellis, chief economist at the Halifax, said his bank's
latest survey did not mean the property market had reached a
turning point, after last year's dramatic slump in mortgage
lending, completed sales and prices.
"It's far too early to make any conclusion," he said.
"The figures are going against the trend and our survey shows that
if you compare the last three months to the previous three [months]
then prices are still down significantly, by about 5%," he
added.
'Modest rise'
Market experts are still agreed that prices will keep falling this
year, probably until the economy stops shrinking, with continued
restrictions on credit reducing the number of people taking out
mortgages.
However earlier this month, the Bank of England reported that the
number of new mortgages approved for home buyers had picked up
slightly in December.
The 31,000 mortgage approvals were up from 27,000 in November,
though they were still the second lowest figure on record.
Estate agents have also been reporting more would-be homebuyers
registering with them, though so far these have not yet been
converted into a consistent rise in sales.
"The Halifax report is consistent with the recent modest rise in
activity as shown in our own surveys," said Brigid O'Leary, a
senior economist at the Royal Institution of Chartered Surveyors
(Rics).
The Bank of England has been cutting the base rate sharply in
recent months in an effort to stave off recession.
It is expected to trim the rate further later on Thursday, with
most analysts expecting a cut from 1.5% to 1%.
Different surveys
One explanation for the Halifax survey recording a rise in prices
in January, while the Nationwide reported a fall, is that they
cover different time periods as well as just their own lending
activity.
"We report prices for the full calendar month, while the Nationwide
reports sales from the 20th of one month to the 20th of the next,
so they may have include some sales that took place at the end of
December," Mr Ellis explained.
When simply comparing the average price in January with the average
price a year ago, the Halifax survey suggests that prices are down
by 16.8% from £197,243 in January 2008.
But the lender prefers to compare the average price for the past
three months with the average price for the same period a year ago,
which produces its current estimate of a 17.2% annual fall.