Halifax House Price Report has "Blown Market Expectations out of the Water"
- Halifax expect further house price rises
- But too soon to say if a corner has been turned
- "rapid return to form" bodes for strong 2020
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UK house prices rose 4.1% in the year to January 2020 according to Halifax, a result that eclipses the market's expectation for growth of 3.0% and suggests the pickup in activity that was first recorded following the December General Election continues.
The Halifax House Price Index report shows UK house prices rose 0.4% in January, ahead of market expectations for a decline in prices of 0.2%, thanks to what Halifax describe as "a number of important market indicators continue to show signs of improvement".
Today's report follows on from January's house price data release that showed UK house prices posted their strongest monthly increase in nearly 13 years in December with a +1.7% month-on-month rise, taking the year-on-year increase to 4%.
Russell Galley, Managing Director at Halifax says they have recorded a pick-up in transactions with more buyer and seller activity consistent with a reduction in uncertainty in the UK economy.
However, Galley says it’s too early to say if a corner has been turned.
"The recent positive figures may actually represent activity that would ordinarily have been expected to take place last year, but was delayed by economic uncertainty. So while housing market activity has undoubtedly increased over recent months, the extent to which this persists will be driven by housing policy, the wider political environment and trends in the economy," says Galley.
Concerning the outlook for house prices, Halifax still expect a moderate rate of house price growth over the course of the year as demand is expected to continue to exceed the supply of properties for sale.
Marc von Grundherr, director of lettings and sale agent Benham and Reeves, commented says there has been a tangible pickup in sentiment in the UK's housing market.
“It would seem that the Boris bounce in market activity that followed December’s election has blown market expectations out of the water where the rate of annual house price growth is concerned and has catapulted a once weary market back to previous form," says von Grundherr.
von Grundherr goes on to say the turn around in the market "is really quite remarkable".
HMRC Monthly property transactions data showed a rise in UK home sales in December with UK seasonally adjusted residential transactions in December were 104,670 – up by 6.2% from November and the highest level since March 2016.
Bank of England figures have meanwhile shown that the number of mortgages approved to finance house purchases were 67,241 in December – this represents a 2.6% month on month rise, following a rise of 0.8% in November. Year on year growth is 4.6% according to the Bank of England.
Michael Stone, Founder and CEO of Stone Real Estate, says levels of market activity have returned "at an alarming rate since the back end of last year and such a rapid return to form where prices are concerned bodes very well for the year ahead."
Stone says the new-build sector is helping drive a rejuvenation in the UK property market with the highest level of housing supply reaching the market in over a decade.
"This supply is vital if we are to satisfy the latest surge in buyer demand however the Government has also announced yet a further boost to market sentiment via the new build sector with the launch of the First Home scheme," says Stone.
