House prices grew at 7.5% in 2013 says Halifax

8th January 2014

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House prices grew at 7.5% in the UK in 2013 according to the Halifax house price survey. Halifax’s assessment is nearly a percentage point lower than Nationwide which said prices had risen by 8.4%.

House prices in the final three months of 2013 were 1.9% higher than in the previous three months. Halifax said prices actually fell by 0.6% in December, taking the average price of a property to £173,467.

Halifax housing economist Martin Ellis says: “House prices in the final three months of 2013 were 1.9% higher than in the previous three months. This was within the narrow range of 1.8-2.1% for this measure recorded in each of the preceding six months. The annual rate of price increase fell slightly compared with last month with prices in the three months to December 7.5% higher than in the same three months last year.

Ellis says that the economic recovery should drive demand but the impact will be reduced somewhat by the failure of earnings to keep pace.

He adds: “Mounting signs that the economic recovery is becoming firmly established, together with a predicted decline in unemployment, should further boost consumer confidence over the coming months. This will increase the likelihood that more people will consider buying a property in 2014, therefore supporting housing demand.

“Nonetheless, continuing pressures on household finances, as earnings again fail to keep pace with consumer price inflation, are expected to constrain demand. The recent strengthening in house prices is increasing the amount of equity that many homeowners have in their home. This will potentially encourage and enable more owners to put their property on the market for sale over the coming year, therefore boosting supply. Indeed, our consumer confidence research shows that there has been a significant improvement in sentiment towards selling in recent months. These factors should help to curb the upward pressure on prices.”

Matthew Turner, director of the UK buying agents, Astute Property Search says: “The drop-off in prices seen by the Halifax in December contrasts sharply with the Nationwide but the quarterly change is far more representative of the market as a whole.

“The overall picture painted by both the Halifax and Nationwide is of a recovering economy that will further support the market during 2014. What’s not in doubt, and what the Halifax references, is that transaction levels have picked up significantly. For transactions likely to have exceeded 1m for the first time since 2007 shows the much improved fluidity of the market. More people are buying and more people are selling than have done for a number of years.

“The annual UK growth figure, shaped by London and the South East, does not accurately reflect many regional performances. Not all areas of the UK are experiencing the same growth as the South East. In many areas the market is still stuttering and the headline numbers make that easy to forget.”

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