A positive sign for the market as annual house price growth rises to 4%
Newly released data released by Halifax has shown that, during December, house prices in the UK were 4.0% higher than in the same month a year earlier.
Halifax revealed that on a monthly basis, house prices rose by 1.7%. In the latest quarter (October to December) house prices were 1.0% higher than in the preceding three months (July to September).
HMRC Monthly property transactions data shows a rise in UK home sales in November. UK seasonally adjusted residential transactions in November were 102,050 – up by 3.2% from October and the highest level since August 2017. Year-on-year, transactions in November 2019 were approximately 1.9% higher than November 2018 (0.2% lower on a non-seasonally adjusted basis).
Russell Galley, Managing Director, Halifax, said: “Average house prices rose by 4% over 2019, at the top of our predicted range of 2% to 4% growth for the year. This was driven by a monthly gain of 1.7% in December which was the biggest monthly increase of 2019, pushing up the year-on-year growth rate and reflecting that December 2018 was a particularly weak month.
“Looking ahead, we expect uncertainty in the economy to ease somewhat in 2020, which should see transaction volumes increase and further price growth made possible by an improvement in households’ real incomes.
“Longer-term issues such as the shortage of homes for sale and low levels of house-building will continue to limit supply, while the ongoing challenges faced by prospective buyers in raising deposits will serve to constrain demand. As a result, we expect a modest pace of gains to continue into next year.”
Josef Wasinski, co-founder of Wayhome, said: “Financial markets benefitted from the well-publicised ‘Boris Bounce’ following last month’s election, with many suggesting this would also be reflected in the housing market.”
“However, this rise in house prices will only be welcomed by those looking to sell as it pushes homeownership further away for those first-time buyers desperate to get out of the ‘rent-trap’.“
“First-time buyers now need the support promised by the Conservative government during the election campaign. We need to see genuine change in the housing market which can provide credible, affordable routes to homeownership.”
Gareth Lewis, director of property lender MT Finance, says: “The Halifax numbers are a positive sign for the market and a step in the right direction. Are we going to see the Boris bounce that we have hoped for?
“The next month will give more clarity and reveal whether this is not just a year-end thing with people trying to get transactions over the line. If we see consistent growth in January, then that is a positive energy for the start of the year. Certainly sentiment is pointing that way – people are talking about the Budget now and more normal politics, rather than fixating on the doom and gloom of what might happen with Brexit.
“Before we get too carried away, there are still some huge ramifications as to what Brexit means but it is not the hot topic of conversation.”
Source: Financial Reporter