Stability expected in UK house prices, Halifax says

Date: Thursday 07 Jun 2012

UK house prices rose by 0.5% month-on-month in May (-0.1% year-on-year) according to the latest data out last night from mortgage lender Halifax.

The consensus estimate was for a rise of 0.5% month-on-month (-0.1% year-on-year).

That following the volatility seen in house prices in the last two months, coinciding with the expiry of the tax-stamp holiday and thanks to a small tightening in the supply/demand balance which has probably helped to support house prices.

However, while house prices rose by 0.8% in the latest quarter –the second consecutive quarterly improvement- they were still down by 0.1% in the three months to May when compared to a year ago. Nonetheless, it must be said that the latter was the smallest yearly decline in house prices for 17 months.

Thus, Martin Ellis, housing economist at Halifax, said:

"Whilst there has been a modest improvement in the trend for house prices recently, the current average UK price is very similar to the levels both a year ago and at the beginning of this year. We expect this situation to continue with prices likely to still be around today's levels at the end of 2012 as the on-going tough economic environment constrains housing demand.

"Recent monthly house sales figures have clearly been affected by the ending of the stamp duty holiday for first-time buyers in late March. Overall, the trend for sales - like that for prices – appears to be one of broad stability."

AB

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