House prices static, but not likely to fall, says Halifax
The cost of buying a home has eased, but Halifax has said that does not mean prices are set for a downward spiral.
People looking to leave rental accommodation and buy a home may be encouraged by the bank's latest house price figures, which indicated that prices over the three-month period ending in February were only 1.8 per cent up on a year earlier. This compared with the three months to January, when the difference was 2.2 per cent.
Indeed, the data also revealed prices dropped by 0.7 per cent on a quarterly basis, from £226,408 to £224,353, with February's 0.4 per cent rise being the first monthly increase since November 2017.
Halifax managing director Russell Galley said: "House prices continue to remain broadly flat, as they have since the end of last year," with house price increases at their lowest since 2013.
However, the affordability of homes may not be improving much, if at all. Mr Galley observed that increased job creation is starting to manifest itself in higher wages - annual pay increases rose from 2.3 per cent in November to 2.8 per cent last month - but these still trail consumer price index inflation.
He also dismissed the idea that house prices might fall, noting that when all factors are considered, there are reasons for them to hold firm. He explained: "While we expect price growth to remain low, the low mortgage rate environment, combined with an ongoing shortage of properties for sale, should continue to support house prices over the coming months.”
The recent decline in house price inflation recorded by Halifax is supported by other surveys; for example, according to the Land Registry house price inflation was 4.8 per cent last year compared with seven per cent in 2016. But there is no clear sign of an overall fall in prices.