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Indicator Digest

HBOS Housing Prices
Halifax is the UK's largest mortgage lender and conducts a wide range of housing research including the long standing Halifax House Price Index. Launched in 1984, the Halifax House Price Index is based on the lending of the UK's largest mortgage lender and provides the longest unbroken monthly data series of any UK housing index. - from HBOS
  • UK

Main Indicator: House Prices m/m (Halifax Bank of Scotland)

Most Recent Release

June
4th, 2009
Actual Forecast Previous Revised Form
2.6% -1.8% -1.7%
For May
Provided by: Halifax Bank Of Scotland
Official Release: PDF

House Prices y/y: -16.3%, pr. -17.7% (Apr), -17.5% (Mar), -17.7% (Feb),
-17.2% (Jan), -16.2% (Dec), -14.9% (Nov), -13.7% (Oct), -12.4% (Sep),
-10.9% (Aug), -8.8% (Jul), -6.1% (Jun)

Avg. Price (s.a.): £158,565, pr. £154,716 (Apr), £157,326 (Mar),
£160,327 (Feb), £163,966 (Jan), £159,896 (Dec), £163,605 (Nov),
£168,176 (Oct), £172,108 (Sep), £174,178 (Aug), £177,351 (Jul)

From the Release: "There was a 2.6% increase in average UK house prices in May. This rise followed three successive monthly falls of between 1.8% and 2.3%. It is always important not to place too much weight on any one month's figures. Historically, house prices have not moved in the same direction month after month even during a pronounced downturn. For example, prices fell by 11% nationally during 1991 and 1992, but there were five monthly price rises in this period.

There are some tentative indications of a possible stabilisation in activity, albeit at a low level. Bank of England industry-wide figures show that the number of mortgages approved to finance house purchase – a leading indicator of completed house sales - increased by 19% between the final quarter of 2008 and the first quarter of 2009, on a seasonally adjusted basis. Approvals in the three months to March were 45% lower than in the same period in 2008. House sales remain substantially below their long term average and market conditions are expected to remain difficult with housing activity continuing at low levels over the coming months.""

Next Release Date: July 03rd 2009, 4:30 EST

Table of Past Data

9/410/911/612/41/22/53/54/35/66/4
Actual-1.8%-1.3%-2.2%-2.6%-2.2%1.9%-2.3%-1.9%-1.7%2.6%
Forecast-1.8%-1.8%-1.5%-1.0%-1.6%-1.7%-2.3%-2.0%-1.0%
Previous-1.7%-1.8%-1.3%-2.4%-2.7%-1.6%2.0%-2.3%-1.9%-1.8%
Revised FromN/AN/AN/A-2.2%-2.6%-2.2%N/AN/AN/A-1.7%

Past Releases

May
6th, 2009
Actual Forecast Previous Revised Form
-1.7% -1.0% -1.9% N/A
For April
Provided by: Halifax Bank Of Scotland
Official Release: PDF

House Prices y/y: -17.7%, pr. -17.5% (Mar), -17.7% (Feb), -17.2% (Jan),
-16.2% (Dec), -14.9% (Nov), -13.7% (Oct), -12.4% (Sep), -10.9% (Aug),
-8.8% (Jul), -6.1% (Jun)

Avg. Price (s.a.): £154,716, pr. £157,326 (Mar), £160,327 (Feb),
£163,966 (Jan), £159,896 (Dec), £163,605 (Nov), £168,176 (Oct),
£172,108 (Sep), £174,178 (Aug), £177,351 (Jul)

From the Relase: ""The average UK house price declined by 1.7% in April, slightly less than the 1.9% monthly fall in the previous month. The house price to earnings ratio – a key measure of housing affordability – is at its lowest level since the autumn of 2002 at 4.26. Mortgage rate cuts have reduced monthly payments for the average existing borrower by £111 since October 2008, also boosting affordability. Mortgage approvals remain at historically very low levels. Rising unemployment, low consumer confidence and the reduced availability of credit are all expected to exert downward pressure on the housing market over the next few months. As a result, further house price declines are likely." 

April
3rd, 2009
Actual Forecast Previous Revised Form
-1.9% -2.0% -2.3% N/A
For March
Provided by: Halifax Bank Of Scotland
Official Release: PDF

House Prices y/y: -17.5%, forecast -17.4%, pr. -17.7% (Feb), -17.2% (Jan),
-16.2% (Dec), -14.9% (Nov), -13.7% (Oct), -12.4% (Sep), -10.9% (Aug),
-8.8% (Jul), -6.1% (Jun)

Avg. Price (s.a.): £157,326, pr. £160,327 (Feb), £163,966 (Jan),
£159,896 (Dec), £163,605 (Nov), £168,176 (Oct), £172,108 (Sep),
£174,178 (Aug), £177,351 (Jul)

From the Release: ""The average UK house price declined by 1.9% in March. House prices in the first quarter of 2009 were 2.7% lower than in the previous quarter, which was smaller than the 5-6% falls recorded in each of the three previous quarters.

Completed sales in England and Wales halved between 2007 and 2008, but there are some very tentative signs that activity may be beginning to stabilise. The latest industry-wide figures show that the number of mortgages approved to finance house purchase in February – a leading indicator of completed house sales - were the highest since May 2008."

March
5th, 2009
Actual Forecast Previous Revised Form
-2.3% -2.3% 2.0% N/A
For February
Provided by: Halifax Bank Of Scotland
Official Release: PDF

House Prices y/y: -17.7%, forecast -18.4%, pr. -17.2% (Jan), -16.2% (Dec),
-14.9% (Nov), -13.7% (Oct), -12.4% (Sep), -10.9% (Aug), -8.8% (Jul),
-6.1% (Jun)
Avg. Price (s.a.): pr. £163,966, £159,896 (Dec), £163,605 (Nov),
£168,176 (Oct), £172,108 (Sep), £174,178 (Aug), £177,351 (Jul)

From the Release: "The average UK house price declined by 2.3% in February. This monthly decrease more than offset January's 2.0% increase. Prices in the three months to February compared to the previous quarter, which provides a better indicator of the underlying trend, were 3.6% lower.

Whilst market activity remains at very low levels, there are some tentative signs that activity may be beginning to stabilise. The house price to earnings ratio – a key measure of housing affordability – has fallen to its lowest level for six years.

Continuing pressures on incomes, rising unemployment and the negative impact of the dislocation of the financial markets on the availability of mortgage finance are, however, likely to mean that 2009 will be another difficult year for the housing market." 

February
5th, 2009
Actual Forecast Previous Revised Form
1.9% -1.7% -1.6% -2.2%
For January
Provided by: Halifax Bank Of Scotland
Official Release: PDF

House Prices y/y: -17.2%, forecast -18.4%, pr. -16.2% (Dec), -14.9% (Nov),
-13.7% (Oct), -12.4% (Sep), -10.9% (Aug), -8.8% (Jul), -6.1% (Jun)
Avg. Price (s.a.): £163,966, pr. £159,896 (Dec), £163,605 (Nov),
£168,176 (Oct), £172,108 (Sep), £174,178 (Aug), £177,351 (Jul)

From the Release: ""There was a 1.9% increase in average UK house prices in January, offsetting December's 1.6% decline. Prices in the three months to January compared to the preceding three months, which provides a better indicator of the underlying trend, were 5.1% lower.

It is always important not to place too much weight on any one month's figures. Historically, house prices have not moved in the same direction month after month even during a pronounced downturn. For example, prices fell for seven successive months in 1989 but subsequently increased in three of the first ten months in 1990 even though the overall trend in prices was downwards.

There are some very early signs that market activity may be stabilising, albeit at quite a low level. Nonetheless, continuing pressures on incomes, rising unemployment and the negative impact of the dislocation of the financial markets on the availability of mortgage finance are expected to mean that 2009 will be a difficult year for the housing market."

January
2nd, 2009
Actual Forecast Previous Revised Form
-2.2% -1.6% -2.7% -2.6%
For December
Provided by: Halifax Bank Of Scotland
Official Release: PDF

House Prices y/y: -16.2%, forecast 16.6%, pr. -14.9% (Nov),
-13.7% (Oct), -12.4% (Sep), -10.9% (Aug), -8.8% (Jul), -6.1% (Jun)
Avg. Price (s.a.): £159,896, pr. £163,605 (Nov), £168,176 (Oct),
£172,108 (Sep), £174,178 (Aug), £177,351 (Jul), £180,344 (Jun)

From the Release: "There was a 2.2% decline in average UK house prices in December. Continuing pressures on incomes and the negative impact of the dislocation of the financial markets on the availability of mortgage finance are expected to exert further downward pressure on the market over the coming months.

But a number of factors will help to support demand and should help to limit the downturn. Improving housing affordability and an easing in the pressure on the majority of households' finances should support market activity and prices. The house price to earnings ratio - a key affordability measure - is at its lowest for five and a half years."

December
4th, 2008
Actual Forecast Previous Revised Form
-2.6% -1.0% -2.4% -2.2%
For November
Provided by: Halifax Bank Of Scotland
Official Release: PDF

House Prices 3m/y: -14.9%, forecast -14.1%, pr. -13.7% (Oct), -12.4% (Sep),
-10.9% (Aug), -8.8% (Jul), -6.1% (Jun), -3.8% (May), -0.9% (Apr)
Avg. Price (s.a.): £163,605, pr. £168,176 (Oct), £172,108 (Sep),
£174,178 (Aug),  £177,351 (Jul), £180,344 (Jun), £184,111 (May)

House prices continue to fall in the UK. Prices were down 2.6% in November, and are now almost 15% lower on an annual basis. Such steep price drops should normally bring in more home buyers, but currently, banks are being very tight with their mortgage lending. Also with the UK economy in recession, there is an even smaller pool of people that want to buy homes, despite the discounted prices. Without a stabilization of the housing market, the UK economy will be hard pressed to stage a significant recovery. 

From the Release: "There was a 2.6% decline in average UK house prices in November. The combination of high house prices in relation to earnings, constraints on householders' incomes and spending power and the decline in the availability of mortgage finance since the summer of 2007 has curbed housing demand. These factors are major contributors to lower house prices and activity.

Lower house prices, however, mean that a key housing affordability measure – the house price to earnings ratio - is at its most favourable for over five years at 4.56. There are also signs that the pressures on incomes may be beginning to ease. Retail price inflation has started to decline and is likely to fall significantly over the coming months, helped by lower energy prices and weaker food price rises."

November
6th, 2008
Actual Forecast Previous Revised Form
-2.2% -1.5% -1.3% N/A
For October
Provided by: Halifax Bank Of Scotland
Official Release: PDF

House Prices 3m/y: -13.7%, forecast -13.4%, pr. -12.4% (Sep), -10.9% (Aug),
-8.8% (Jul), -6.1% (Jun), -3.8% (May), -0.9% (Apr)

Avg. Price (s.a.): £168,176 pr. £172,108 (Sep), £174,178 (Aug), £177,351 (Jul),
£180,344 (Jun), £184,111 (May)

UK housing prices were down 2.2% in October, accelerating the pace of monthly price declines. On a quarterly year-on-year basis prices were down 13.7%, which is the largest fall in the index since its inception in 1983. Halifax calculates the annual figure in terms of quarterly year-on-year change to iron out monthly fluctuations. House prices were 14.9% weaker than they were in the corresponding month last year. Weak mortgage lending has crimped the supply of mortgage financing, which is making the potential pool of home buyers smaller.

From the Release (Martin Ellis, chief economist): "House prices declined by 2.2% in October. Housing market conditions remain challenging in the face of the significant pressures on householders' incomes and the reduction in the availability of mortgage finance since last summer. But housing affordability is improving significantly. The house price to average earnings ratio has fallen below 5.0 for the first time for four and a half years. We expect a further improvement in the ratio over the coming months." 

October
9th, 2008
Actual Forecast Previous Revised Form
-1.3% -1.8% -1.8% N/A

For September
Provided by: Halifax Bank Of Scotland
Official Release: PDF

House Prices y/y: -12.4%, forecast -12.5%, pr. -10.9% (Aug), -8.8% (Jul),
-6.1% (Jun), -3.8% (May), -0.9% (Apr)
Avg. Price (s.a.): £172,108, pr. £174,178 (Aug), £177,351 (Jul),
£180,344 (Jun), £184,111 (May)

UK house prices were down 12.4% in annual terms, the steepest decline in 25 years. UK banks have been reluctant to lend the last several months, causing a smaller pool of buyers and has forced sellers to lower prices in order to move their properties. On the month, prices were down 1.3%, which was the smallest monthly fall in 7 months, which means the pace of price declines may be declining. In a separate release the Bank of England showed that mortgage interest rates fell in September to 5.93% from 6.08 in August. It was the 3rd month in a row that rates have decreased, which may help more people to afford mortgage. Whether banks lend is another story. The cut by the Bank of England yesterday should work to lower variable rates as well. 

From the Release: "Average earnings have increased at an insufficient pace to match the rise in retail prices over the past year, rising by 3.5% compared with a 5.0% increase in the Retail Price Index. At the same time as this decline in real earnings, significant rises in fuel and food prices - 25% and 13% higher respectively during the last 12 months - have reduced the amount of discretionary income available to households.

The resulting pinch on incomes, combined with the high level of average house prices in relation to earnings, has made it difficult for potential house purchasers to enter the market. The decline in credit availability is a further constraint on buyers. These significant pressures on housing demand are causing house prices and activity to fall.

The recent weakening in the economy has alleviated the MPC's inflationary concerns over the coming months sufficiently to provide the scope for yesterday's cut in Bank rate. Lower interest rates will help mortgage borrowers faced with increasing pressures on their finances and provide a valuable support to the housing market."

September
4th, 2008
Actual Forecast Previous Revised Form
-1.8% -1.8% -1.7% N/A
For August
Provided by: Halifax Bank Of Scotland
Official Release: PDF

House Prices y/y: -10.9%, forecast -10.7%, pr. -8.8% (Jul), -6.1% (Jun),
-3.8% (May), -0.9% (Apr)
Avg. Price (s.a.): £174,178, pr. £177,351 (Jul), £180,344 (Jun), £184,111 (May)

House prices fell as expected, and has been at this pace of decline for several months now: June(-1.9%), July(-1.7%). This is a easier pace than the -2.5% in both March and May. Housing prices and activity have been depressed by high prices of fuel and food. Halifax is expressing optimism, noting that a strong labor market should support the housing market. However, employment has started weakening, with claimant count numbers have been increasing since April, and the latest unemployment rate jumped to 5.4%.

The continuing decline in house prices and transactions will put pressure on the BoE to cut rates, although the bank is poised to hold for the rest of the year until the inflation storm passes. The British housing bubble was arguably as vulnerable as the American one. Although the subprime meltdown ignited first in the States, the British housing market has caught up to the same degree of slowdown if not worse. 

From the Release, Martin Ellish Chief Economist, "House prices declined by 1.8% in August. A solid labour market, low interest rates and a shortage of new houses continue to support the market. The pressure on householders' income, together with the reduction in the availability of mortgage finance due to the global financial markets crisis, is resulting in both lower property prices and activity levels.

This week's announcement on stamp duty is a welcome development and will benefit a significant number of homebuyers, particularly outside the south east of England. Market conditions, however, will remain challenging."