Posted on February 6th, 2013 | Categories - News
Despite reporting a fall in January of 0.2%, the latest Halifax House Price Index figures show an annual rise of 1.3%; the first time since October 2010 that an increase has been reported.
The figures are different to those reported last week by the Nationwide, who reported an increase in house prices during January of 0.50%, with prices remaining unchanged on the same time last year.
The Halifax also reported that the average home is now worth £162,932, almost identical to the figure from the Nationwide.
There are signs that the housing market might slowly be waking up from its’ post credit crunch slumber.
The Halifax reported that activity in the housing market was at its highest level for five years, with an increase of 5% in the number of sales during 2012. However, current levels are still far removed from the peak of the housing boom; in 2012 932,000 houses were sold, compared to 1,619,000 in 2007.
Additionally, mortgage approvals for house purchases have risen for the past five months in a row, leading to a 19% increase over the same period of time.
Mortgage experts believe that the increased activity could be down to the Funding for Lending Scheme, which finally seems to be having a positive effect on the housing market after a slow start.
Martin Ellis, Housing Economist at the Halifax, said: “The signs of improvement in the housing market towards the end of last year continued in January. Prices in the three months to January were 1.9% higher than in the previous three months; the strongest figure in this measure of the underlying trend for three years. Prices were also 1.3% higher than in the same period a year ago, marking the first annual rise for 27 months.”
Ellis continued: “Market activity has also improved with sales in 2012 at their highest for five years. Rising mortgage approval numbers point to further increases in home sales in the coming months. The Funding for Lending scheme has helped lenders to lower interest rates and improve availability in the past few months. This is likely to have been a factor contributing to the pick-up in both home sales and prices.
However, despite the positive signs the year ahead looks uncertain, Ellis again: “The outlook for the UK economy and house prices, however, is more unclear than usual. Subdued economic growth and pressures on household finances are expected to constrain housing demand. Overall, we expect continuing broad stability in house prices nationally in 2013.”