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House price rise in January but longer-term picture less rosy

Simon Ward
by Lovemoney Staff Simon Ward on 06 February 2012  |  Comments 4 comments

Slight price rise in first month of the year but prices are down year-on-year, says Halifax.

House price rise in January but longer-term picture less rosy

House prices rose by 0.6% in January, according to Halifax’s latest House Price Index, but the longer-term picture isn’t looking so good.

Prices fell by 0.9% over the last three months of 2011 and are 1.8% lower than they were at this time last year. The average UK property price is £161,000, roughly the same as it was around eight months ago, when it was £161,039.

Mortgage approvals are rising slightly, says Halifax, with approvals in the final quarter of 2011 3% higher than in the previous quarter and 16% higher than they were in the last quarter of 2010.

Halifax says low interest rates are continuing to support some housing demand. But, like other commentators, it says events in the Eurozone and any repercussions for the UK will determine how well prices fare in the immediate future.

Martin Ellis, Halifax’s housing economist, said: “If the UK can avoid a prolonged recession, we expect broad stability in house prices in 2012.”

At lovemoney.com, you can research all the best deals yourself using our online mortgage service, or speak directly to a whole-of-market, fee-free lovemoney.com broker. Call 0800 804 8045 or email mortgages@lovemoney.com for more help.

More: Lowest five-year fixed mortgage rate ever | Government details plans to help homebuyers and build more homes

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Comments (4)

  • richmoll
    Love rating 26
    richmoll said

    The heterogenous nature of housing is such that a completely accurate calculation of price changes is not possible. I've heard the statisticians from Halifax say exactly that. The problem is that the media pick it up and try and make a story out of it. If the halifax reported 9.1% increase and the Nationwide a 9.8% increase we might assume that they were saying broadly the same thing. If however we take the same small difference and place it either side of zero eg one says a 0.4% fall and the other a 0.3% rise then we might conclude that they saying the opposite. Whereas what is really happening is that they are using a different set of house sales and hence getting a slightly different result. There is a degree of error and we must accept that and not read too much into this.

    What appears to be broadly happening is that prices are static which if inflation is running at 4 or 5% means that they are slowly getting cheaper - hurrah for that.

    Report on 06 February 2012  |  Love thisLove  0 loves
  • krustallos
    Love rating 35
    krustallos said

    Why say "the longer-term picture isn’t looking so good"? Unless you own property purely as an investment, or want to take out a second mortgage (rarely advisable) a fall in prices from the current astronomical level would in fact be very good. We don't applaud price inflation in any other area of life, why's it considered desirable in housing?

    Report on 07 February 2012  |  Love thisLove  1 love

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