House prices in December grew at a faster rate than in the previous month, according to the latest figures released by the Halifax.
Prices were 1.3% higher in the three months to December than compared to the same period in 2017, up from the rate of just 0.3% recorded by the bank a month ago. But despite this, the final quarter of 2018 showed house prices to be 0.4% lower than in Q3. Mortgage approvals fell by 4.5% in November to 63,728.
Average price reaches six-month high
There was encouragement with average prices rising on a monthly basis, with the December figure of £229,729 representing a growth of 2.2% on the previous report. That’s the highest average since Halifax’s data for July last year.
Although the latest report’s findings appear encouraging, the ongoing uncertainty over Brexit and its effects on the UK economy loom large.
“Overall, house price growth in 2018 was very much within the range of 0-3% as we forecast at the start of the year,” said Russell Galley, Halifax managing director.
Brexit uncertainty
“In 2019, we’re expecting continued stability in house prices with between 2% and 4% price inflation. This is slightly stronger than 2018, but still fairly subdued by modern comparison. However, this expectation will clearly be dependent on the Brexit outcome, with risks to both sides of our forecast.
“Of course, there are a number of other factors that will impact the market in 2019. The need to raise a significant deposit still acts as a restraint for those looking to buy a new home, limiting the number of potential purchasers.”
Halifax’s figures come a few days after the Nationwide reported a fall of 0.7% in house prices in December, prompting a sober reflection from Jeremy Leaf, north London estate agent and a former Royal Institute of Chartered Surveyors residential chairman.
“At first glance the Halifax numbers are really positive as they reflect a time of particular political uncertainty and the height of Brexit turmoil,” he said.
“But when taken with the recent fall in transactions it is clear that the increase has more to do with a shortage of stock rather than a bounce back in the market generally.”
#Halifax surprisingly report #UK #house #prices spiked 2.2% m/m in December. This followed a 1.2% m/m drop in November & prices still fell 0.4% q/q in Q4 2018. Annual rate of increase was 1.3% in 3 months to December, up from near 6-year low of 0.3% in 3 months to November
— Howard Archer (@HowardArcherUK) January 8, 2019
Howard Archer, chief economic adviser to the EY Item Club
