Annual rate of house price growth rises to 9.7% in January says Halifax

4th February 2016


UK property prices jumped by 1.7% on a month-on-month basis during January driving the annual rate of growth up to 9.7%, according to the Halifax.

January’s monthly rise follows an increase of 2% in December, and flat prices in November.

The year-on-year increase marks a rebound after prices dipped to 9% in the three months to November from 9.7% in the three months to October.

Martin Ellis, Halifax’s housing economist, said: “The imbalance between supply and demand continues to exert significant upward pressure on house prices. This situation looks set to persist over the coming months.

“Further ahead, increasing affordability issues, as price increases continue to exceed wage growth, are likely to curb housing demand and cause price growth to ease.”

Howard Archer, chief European and UK economist at IHS Global Insight highlighted that the increase is well above expectations and contrasts markedly with the Nationwide, which reported that house prices edged up 0.3% during the month.

He said: “The Halifax house price data have been much stronger than most other measures and contrast particularly markedly with the Nationwide’s data.

“This suggests it is advisable not to pin too much weight on one particular house price survey or measure or on one month’s figures but to try and take an overall view from all the data and surveys.

“ We expect house prices to rise by around 6% over 2016, amid healthy buyer interest, supported by largely decent fundamentals, and a shortage of properties. A significant upside risk to this forecast comes from the shortage of properties on the market.”

Nevertheless, Archer warned that the upside for house prices is expected to be increasingly constrained by more stretched house prices to earnings ratios and tighter checking of prospective mortgage borrowers by lenders.

He said: “It is still very possible that interest rates could start edging up late on in 2016 (this could have a significant impact on house buyer psychology given that the Bank of England has kept interest rates at 0.50% since March 2009.”

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