Property prices plateaued: Halifax June report |
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Thu, 07 Jul 2005 16:35
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LONDON: The monthly survey by lender Halifax has revealed further evidence of an economic slowdown: house prices barely inching up during June. In property markets across the UK, growth in house prices was reported as largely ‘static’.
In June house prices were up 0.1 percent month-on-month; on a year-on-year basis it showed a growth of 3.7 percent - still less than marginal. The sluggishness has pushed annual rise in property prices to its lowest in five years. The UK’s average house price is now £162,605 - a number which has seen little movement during the first six months of 2005.
Area-wise the property markets registered some not very significant dips and highs in property prices. The north saw some rise in house prices while the south saw declines; the gap between the two was at the lowest of four years.
Scotland and Northern Ireland were the only two exceptions with house price inflation rising noticeably – 12.5 percent and 26.9 percent respectively.
A few English regions such as the South East and Greater London noticed house prices declining. Largely however, reports from all the regions point to a stabilising market. Halifax said there is no likelihood of a market crash.
Martin Ellis, chief economist for Halifax said there were no signs of a further southward movement in the indexes which suggested of a stability. The steady recovery in recent months, following the sharp fall in the later part of 2004, had now reached a plateau. If we were to go by the number of approved housing loans, then things can only be looking up from here. For five consecutive months, this number has been steadily increasing. Halifax Estate Agents said they were inclined to feel optimistic with sales being steady since February.
The economist said that additionally the economic fundamentals of the housing market were sound which ruled out any cause for anxiety. However, skeptics insist that the housing market could still see substantial falls in house prices in the coming months.
It is hoped that this evidence of a slowdown will persuade the bank of England to reduce base rate by a quarter points. The Bank’s Monetary Policy Committee is scheduled to meet this week to decide on whether to hold the rate at 4.75 percent or to change it. Analysts expect the added pressure of a consumer slowdown would make the MPC announce a cut.
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