Halifax survey shows house price inflation at a six month high

Halifax survey shows house price inflation at a six month high

	Published : Fri, 02 Dec 2005 14:05 By : Paula Demarzio Print this Story

According to Halifax house price survey published on Friday, house prices rose by 1.2 per cent last month, which was higher than expectations. It is the biggest increase in three months despite a static growth rate in October.

The average price of a home in the UK is now at a seasonally adjusted £170,086 in November.

“The high level of employment and good earnings growth continues to underpin housing demand,” said Martin Ellis, the Halifax chief economist.

Inflation of home prices increased by 4.5 per cent in the quarterly leading to November when compared to last year, which is the highest in six months. But, it is considerably less than the 16.8 per cent increase registered in November 2004.

However, Ellis added: “The slowdown in UK economic growth over the past year and the historically high level of house prices relative to average earnings are, however, expected to curb the recent improvement in housing demand and prevent another sustained period of sharply rising property values.”

In this week, Nationwide reported that house prices were unchanged in November, and rose by only 2.4 per cent compared to last year.

Halifax, the country’s biggest mortgage lender, said the number of properties bought in October was higher when compared to the same month in the previous year.

According to it, the number of mortgage approvals to finance property purchases increased for the fourth month consecutively in October, as per the latest Bank of England figures.

The number of loans borrowed have also increased to 113,000, which is 35 per cent higher than in October 2004.

Chief UK economist at Global Insight, Howard Archer, said: “The Halifax data will undoubtedly increase speculation that the recent clear pick up in housing market activity and buyer interest is starting to feed through to revive house prices.” But he added: “Not only is mortgage activity still well below recent past peak levels, but most affordability ratios are still stretched and will become more so if house prices start moving back up markedly.”