The Inside Edge
The Halifax has released its latest set of property figures and has reported a fall in house prices of 0.5% in February. This has offset a seasonal rise of 0.6% from the previous month but it is still at odds with the Nationwide who have declared an overall increase of 0.6% for the first two months of 2012.
The Halifax’s three month index, which is viewed more favourably by economists as it tends to iron out any seasonal spikes, reports a 1.1% drop in prices in the last three months while the annual index points to a 1.9% fall.
The report concludes by stating that the average property price in the UK currently stands at £160,118 and it suggests that the market is facing ‘significant uncertainties’ for the rest of 2012.
Martin Ellis, Housing Economist at the Halifax claimed that a relatively small number of transactions were currently leading to a situation which was roughly similar to the same period last year.
“Overall, prices nationally are at broadly the same level as last spring,” he said.
“This stability in prices is explained by the fact that market conditions have changed very little over this period with demand supported by low interest rates and supply remaining tight.”
However, Mr Ellis went on to refer to the uncertainty that clouds the market and like many other property experts, he suggested that the true picture would not be made clear until the Eurozone crisis was addressed.
“Significant uncertainties, however, persist and the prospects for house prices during 2012 will, to a large extent, depend on events in the Eurozone and the potential knock-on effects on the UK,” he concluded.
To the general public, any uncertainty probably isn’t helped by contradictory claims from the Nationwide who suggest that property prices have increased. Both organisations use their own mortgage data to compile their statistics but the anomaly tends to arise from the fact that the Halifax figures are compared to those from a year ago while Nationwide use a month by month and quarter by quarter comparison.
Howard Archer from HIS Global Insight summed up the overall picture as one of uncertainty and one that is further clouded by the impending closure of the Stamp Duty Holiday.
“With housing market activity recently trending up moderately and the economy showing signs of improvement, some of the downside risks to house prices are currently abating. We still expect house prices to drift downwards over the coming months, although we have recently trimmed our forecast overall fall in 2012 to 3% from 5%,” he said.
Overall it’s another confusing outlook and one that is unlikely to become any clearer until the second half of 2012.