Halifax House Price Index

Marketwired

LONDON, UNITED KINGDOM--(Marketwired - Oct 2, 2013) -

UK House prices
August 2013 (seasonally adjusted)
Annual change +5.4%
Quarterly change +2.1%
Monthly change +0.4%
Average Price £170,231

Commenting, Martin Ellis, housing economist, said:

"House prices in the three months to August were 2.1% higher than in the previous three months; unchanged from both June and July. Prices in the three months to August were 5.4% higher than in the same three months last year, the highest annual rate since June 2010.

"Housing market activity is also on an upward trend with the number of mortgage approvals for house purchases - a leading indicator of completed house sales - 10% higher in the three months to July compared with the previous quarter after allowing for seasonal influences.

"Economic improvement and low interest rates, supported by official schemes such as Funding for Lending and Help to Buy, appear to have boosted housing demand in recent months. Nonetheless, relatively modest economic growth and below inflation rises in earnings are likely to act as a brake on the market. Overall, house prices are expected to rise gradually over the remainder of the year."

Key facts

  • House prices in the latest three months (June-August) were 2.1% higher than in the preceding three months (March-May). This was the same rate of increase as in both June and July.

  • Prices in the three months to August were 5.4% higher than in the same three months a year earlier. This was higher than July's 4.6% increase and is the highest annual rate since June 2010 (6.3%). The annual rate has picked up from 1.1% in March 2013.

  • House prices rose by 0.4% in August. This was the seventh consecutive monthly increase.

  • Activity has risen as well. The number of mortgage approvals for house purchases - a leading indicator of completed house sales - increased by 4% between June and July, to 60,600; the first time that approvals have exceeded 60,000 since early 2008. Approvals in the three months to July were 10% higher than in the preceding three months. (Source: Bank of England, seasonally-adjusted figures.)

ABOUT THE HALIFAX HOUSE PRICE INDEX

The Halifax House Price Index is the UK's longest running monthly house price series with data covering the whole country going back to January 1983. From this data, a "standardised" house price is calculated and property price movements on a like-for-like basis (including seasonal adjustments) are analysed over time. The annual change is calculated as an average for the latest three months compared with the same period a year earlier. These figures provide a better picture of the underlying trend compared to a monthly year-on-year number as they smooth out any short-term fluctuations.

  • The relatively low level of mortgage payments in relation to income is supporting housing demand. Typical mortgage payments for a new borrower - both first-time buyers and homemovers - at the long-term average loan to value ratio, accounted for 27% of disposable earnings in 2013 Quarter 2; its lowest proportion since 1999 Quarter 2 and comfortably below the average of 36% over the past 30 years.

  • More properties are coming on to the market. Whilst demand has increased more quickly than supply, surveyors have reported a rise in the number of homeowners providing instructions in each of the last six months, according to RICS. Further improvements in the availability of properties for sales could help to bring demand and supply into better balance, constraining the upward pressure on prices.

UK House Prices: Historical Data
All Houses, All Buyers (Seasonally Adjusted)

Index
1983=100
1

Standardised
Average Price
£

Monthly
Change
%

Quarterly
Change
%*

Annual
Change
%**

Price/ Earnings Ratio
2 3

Period
Aug 2012 518.8 160,292 -0.1 -0.5 -0.9 4.40
Sep 516.1 159,467 -0.5 -0.3 -1.2 4.39
Oct 515.6 159,313 -0.1 -0.8 -1.7 4.39
Nov 523.6 161,795 1.6 -0.3 -1.3 4.44
Dec 528.4 163,256 1.0 0.6 -0.3 4.48
Jan 2013 527.0 162,844 -0.3 1.8 1.3 4.49
Feb 529.7 163,678 0.5 1.9 1.9 4.51
Mar 531.7 164,289 0.4 1.4 1.1 4.51
Apr 537.8 166,175 1.1 1.3 2.0 4.53
May 540.4 166,982 0.5 1.6 2.6 4.57
Jun 544.0 168,072 0.7 2.1 3.7 4.59
Jul 548.8 169,567 0.9 2.1 4.6 4.62e
Aug 551.0 170,231 0.4 2.1 5.4 4.63e

EDITORS' NOTES

* House price data on a quarterly basis provides the clearest indication of overall market trends, smoothing out the monthly volatility caused by the reduced number of monthly transactions used to calculate all house price indices.

** The annual change numbers are the quarterly year-on-year figures. These figures provide a better picture of underlying trends compared to a monthly year-on-year number as they smooth out any short-term fluctuations.

1. INDEX

The standardised index is seasonally adjusted using the U.S. Bureau of the Census XII moving-average method based on a rolling 84-month series. Each month, the seasonally adjusted figure for the same month a year ago and last month's figure are subject to revision.

2. STANDARDISED AVERAGE PRICE

The standardised average price is calculated using the Halifax's mix adjusted methodology.

3. PRICE/EARNINGS RATIO

Ratio of the Halifax standardised average price to national average earnings for full-time male employees. Price Earnings ratios revised to reflect new data in the Annual Survey of Hours and Earnings (ASHE). e Halifax estimates.

Halifax House Price Index is prepared from information that we believe is collated with care, but we do not make any statement as to its accuracy or completeness. We reserve the right to vary our methodology and to edit or discontinue/withdraw this, or any other report. Any use of this report for an individual's own or third party commercial purposes is done entirely at the risk of the person making such use and solely the responsibility of the person or persons making such reliance. © Bank of Scotland plc all rights reserved 2013.

Contact:
Halifax Press Team
Ben Marquand
01422 332833 / 07881 311199
ben.marquand@halifax.co.uk

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