Halifax cautions about annual rate of house price inflation |
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Published
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Fri, 07 Oct 2005 09:05
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LONDON - The Halifax bank said on Thursday that the house prices in Britain climbed by 1.2 percent in September as compared with those in August.
UK's biggest mortgage lender said that although the gain was 1.8 percent in the third quarter, the annual price inflation was down over a period of one year. Currently the annual rate of inflation is 3 percent. This is way below the 20.5 percent registered at a corresponding time last year.
However even at 3 percent, this figure is higher than the 2.5 percent recorded in the previous month and represents a gain of 2 percentage points in the last three months alone. This indicates that the housing market in the country is definitely showing signs of revival.
Halifax chief economist Martin Ellis said that the Bank of England's August rate cut was a significant decision since it would interest would-be home buyers, "The reduction in economic growth this year and the continuing high level of house prices in relation to average earnings are expected to prevent a sustained surge in house prices," he commented. "Healthy household income growth and historically high levels of employment are supporting the housing market."
Halifax, which is a part of the HBoS banking group was more withdrawn on the issue of the annual rate of house price inflation which as mentioned was significantly lower than the previous year's data.
Howard Archer, chief UK economist at Global Insight was non-committal about the prospect of a serious revival in the fortunes of the housing market, "We remain skeptical that house prices are set to see sustained sharp rises any time soon. Most affordability ratios are still stretched and will only improve gradually over the coming months," he said.
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