Lack of supply props up UK house prices in August - Halifax
By Michele Maatouk
Date: Friday 06 Sep 2019
(Sharecast News) - UK house prices ticked up a touch more than expected in August as a lack of supply helped to offset Brexit uncertainty.
According to figures released by lender Halifax on Friday, house prices rose 0.3% on the month in August compared to a 0.4% increase in July, beating expectations for a 0.2% jump.
On the year, prices were up 1.8% compared to a 1.5% rise in July, falling well short of expectations for a 3.4% increase.
The average house price is now £233,541.
Managing director Russell Galley said the 0.3% monthly increase further extends "the predominantly flat trend" seen over the last six months, with the average house price having barely changed since March.
"While ongoing economic uncertainty continues to weigh on consumer sentiment - with evidence of both buyers and sellers exercising some caution - a number of important underlying factors such as affordability and employment remain strong," he said.
"Although the housing market will undoubtedly be influenced by events in the wider economy, it continues to show a degree of resilience for the time being. We should also not lose sight of the fact that the single biggest driver of both prices and activity over the longer-term remains the dearth of available properties to meet demand from buyers."
This is the first set of data released since Halifax changed its methodology following criticism that it was unreliable. Samuel Tombs, chief UK economist at Pantheon Macroeconomics, pointed out that until this month's release, the was still being produced on the basis of the methodology introduced when the index was first published in 1983.
"From today, the index is published on a chained-linked basis to reflect the changing attributes of a standard house over time." he explained.
"The sample has been widened to include homes bought with the assistance of the Help to Buy Scheme, with shared-ownership mortgages or with a buy-to-let loan. In addition, more granular detail on the location of the property being purchased now are captured.
"As a result, the index is substantially less volatile and points to significantly slower growth in house prices than before."
North London estate agent and former RICS residential chairman Jeremy Leaf said: "Once again we are seeing the market demonstrating underlying strength, supported particularly by lack of stock, without necessarily any fireworks which is remarkable considering the current political turmoil.
"What we are seeing on the ground is a little more enthusiasm from buyers and sellers returning from holiday and finding they can put off making the necessary changes in their accommodation no longer. Realistic buyers and sellers are also taking advantage of improved affordability and low mortgage rates but we are finding that it is only those prepared to negotiate hard who are successful."
Capital Economics said: "While the revamped Halifax house price index pointed to slightly faster annual house price growth in August, it is a far cry from the unusually strong rates shown by the old series. Nonetheless, with ongoing Brexit uncertainty, we expect house prices to remain sluggish this year."
Email this article to a friend
or share it with one of these popular networks:
You are here: news
10 Lower Thames St,
London EC3R 6EN