7
Jun
UK house prices will flatline, says the Halifax
UK house prices will end the year at the same level as now owing
to tough economic conditions, a lender has predicted. The
Halifax, now part of the Lloyds Banking Group, said prices were
broadly the same as a year ago, falling by 0.1% in May compared
with a year earlier. Various surveys have suggested the UK housing
market is relatively stagnant. But Halifax said prices had picked
up between April and May, rising by 0.5%, to an average of
£160,941. These monthly figures are relatively volatile,
having shown a 2.3% fall between March and April.
The three-month on three-month measure showed a 0.8% rise in prices
by the end of May. "While there has been a modest improvement in
the trend for house prices recently, the current average UK price
is very similar to the levels both a year ago and at the beginning
of this year," said Martin Ellis, housing economist for the
Halifax. "We expect this situation to continue with prices likely
to still be around today's levels at the end of 2012 as the ongoing
tough economic environment constrains housing demand. "He said that
uncertainty in the economy and an "intensification" in the eurozone
crisis meant that lenders would continue to be cautious in offering
mortgages. This would continue to put the brakes on any housing
market activity or price rises.
'Stable'
Halifax and rival Nationwide construct their house price data from
samples of their own mortgage lending. A recent Nationwide
survey suggested that prices were "fairly stable". The lender said
prices rose by 0.3% in May, but this still left them 0.7% lower
than a year ago. The year-on-year comparison is calculated slightly
differently by the two lenders. The Halifax compares the previous
three months with the same three months a year earlier to give a
smoother comparison, rather than a direct comparison of the
equivalent months as calculated by the Nationwide.
One industry commentator said that a stable market was actually a
sign of inactivity. Ashley Alexander, managing director of
estate agent review website MeetMyAgent.co.uk, said that major
sporting occasions this summer would mean fewer people spending
time out househunting. "There are simply too many factors
preventing a purchase. A lack of stock generally, intransigent
sellers, tougher lending criteria and consumer caution are keeping
transaction levels low," he added. "Even the prospect of low
interest rates for another year or two, or even three, is not
enough to convince people to buy."
The Land Registry survey, widely regarded as the most comprehensive
although it only covers England and Wales, suggested that prices
had fallen by 1% in April compared with a year earlier.
Source: BBC News