Halifax – Annual house price growth rises to 2.8%
Annual house price growth rose to 2.8% in February, according to the latest Halifax house price index.
Its data shows that on a quarterly basis, house prices were 2.9% higher than in the preceding three months, while prices rose by 0.3% on a monthly basis between January and February.
The most recent Nationwide index, published last week, reported that house price growth rose from 1.9% in January to 2.3% in February, the strongest rate seen since July 2018.
Russell Galley, managing director of Halifax, said: “The UK housing market has remained steady heading into early spring, with house prices increasing by 0.3% in February and up 2.8% on the previous year.
“Much like we saw in January, the increases seen in February reflect the continued improvement of key market indicators. The sustained level of buyer and seller activity is strong compared to recent years, with positive employment conditions and a competitive mortgage market continuing to support demand.
“Looking ahead, there are a number of risks, including the potential impact of coronavirus, which continue to exert pressure on the economy and we wait to see how these will affect housing market sentiment later in the year.”
Anna Clare Harper, co-founder of property fund Anglo Residential, commented: “February’s house price data shows an uptick in confidence. There is no evidence yet that factors affecting confidence elsewhere, such as Coronavirus, will affect house prices. However, anything that affects sentiment has a knock-on effect on short-term confidence. Next week’s Budget is also a source of uncertainty, and its contents have the potential to affect house prices throughout the coming months.”
Lucy Pendleton, founder and director of James Pendleton estate agents, added: “It’s no surprise to see continued healthy price growth like this. Demand and supply have both been rebounding recently but, so far, the number of new buyers is definitely outpacing the return of sellers.
“Coronavirus impacted our business for the first time on Wednesday, stealing away a sale that was just days from exchanging. The buyer worked in the events industry which is being rocked by large numbers of cancellations. He was unfortunately one of the employees told his job was at risk, forcing him to pull out of the purchase completely. The hope is this will remain an isolated case but the impact of the virus will become clearer in March.
“For now, with valuations still rising and competition for certain properties still fierce, buyers have begun to put in offers on multiple properties in a bid to secure an option before stalling over exchange of contracts in case something better comes along. This could create an unappealing log jam and put more completions at risk if Covid-19 starts to become a major factor.
“We’ve been told the virus will get worse before it gets better but, on the positive side, registrations for purchase are running extremely hot at the moment. Despite the newspaper and TV screens being peppered with images of people wearing face masks and plastic bottles on their heads, there’s still a huge appetite to move, and buyers and vendors have so far refused to put their searches on hold.”
Source: Financial Reporter