4
Nov
HOUSE PRICES RISE BY 1.8% IN OCTOBER
House prices in the UK rose by 1.8% in October compared with the
previous month - but this followed a big drop a month earlier, the
Halifax has said.
The lender, part of the Lloyds Banking Group, said that the less
volatile three-month on three-month comparison showed property
values dropped by 1.2%.
The average home cost £164,919, according to the
survey.
Monthly changes in prices had been a mixed picture, the lender
said, but it is not predicting a sustained fall.
"An increase in the number of properties available for sale in
recent months, together with a decline in demand, has put some
downward pressure on prices in recent months," said Halifax housing
economist Martin Ellis.
"We do not believe that prices are set to fall sharply over a
sustained period."
Volatile
A month ago, the Halifax survey produced a surprising figure that
house prices had dropped by 3.6% in September, compared with the
previous month - the biggest drop on record.
However, the lender, and analysts, warned at the time that this
was likely to be a blip and should not be regarded as a measure of
long-term price trends.
This seems to have been corrected with the monthly rise in
October, with the figures affected by low levels of activity in the
market.
The less volatile quarter-on-quarter measure has shown a
smoother trend - that prices have remained relatively static or
have fallen slightly. In September this showed a 0.9% drop. In
October, the decline was 1.2%.
Average property prices in the UK remain 1.2% higher than a year
ago, continuing a downward trend from 6.9% in May.
Continue reading the main story
“
Start Quote
The housing market really does not seem to have got much going for
it at the moment”
End Quote
Howard Archer
IHS Global Insight
This annual figure is calculated by the Halifax by comparing the
preceding three months with the same three months a year earlier,
arguing that this irons out any short-term fluctuations.
When comparing the actual average price in October alone, then
the average home cost £71 less in October 2010 than it did in
October 2009.
Interest rates
The most recent survey from rival Nationwide Building Society has
painted a similar picture of year-on-year prices approaching
parity.
The Nationwide said that such parity could be reached by the end
of 2010.
However, the Halifax said prices would not see sustained sharp
falls in the coming months - owing primarily to low interest
rates.
The Bank Rate has stood at 0.5% since March last year, leading
to relatively cheap repayments for many mortgage holders,
especially those on tracker deals.
"Interest rates are likely to remain very low for an extended
period, which will continue to support the improved mortgage
affordability position for homeowners," Mr Ellis said.
Howard Archer, chief UK economist at IHS Global Insight, said:
"The latest housing market data and surveys have been consistently
weak, and the housing market really does not seem to have got much
going for it at the moment."